fate vs free will ITT

I've heard Bill Gates speak on this before, and I believe the point he is making is that neither could he except for some luck beyond being born in the right place with the right kind of mind.

I think Gates is just being polite but even if he actually believes it. At Gates age it is too late but late but if you take someone in their twenties who is demonstrating that he is on the trajectory to greatness and you transpose him into an environment that is completely different than his he'll adapt and still turn out successful assuming you ensure he survives the first year.

If I remember the story correctly, he turned IBM down like three times before he agreed to build them an operating system. Multiple others turned IBM down as well. My understanding is that Gates finally capitulated in the hopes it would bring more promising projects in the future, but he didn't see developing what became DOS as much of anything.

With regard to you're second point, it really depends on what you mean by success. My impression is, in the context of this thread, we are talking about the upper echelon (not the upper middle class, not the high income but not rich, etc.). If that is the case, then it seems to me you cannot discount luck. Certainly it is not a sufficient condition and it is probably not a necessary condition, but it does seem to play a significant role.

Bill Gates didn't develop DOS?

He purchased the rights to DOS because he needed an operating system for the 8086. I don't understand how that is luck.

I think people who end up in the top 20% will end up in the top 205 in almost any other environment. They might go from top 1% to the 15th percentile but successful will always be successful.


No he bought it. Microsoft then developed it but it was actually someone else who developed the original DOS.

I'm fairly certain that while Microsoft took the logical step to work with the PC makers to have Windows as their default OS, Apple went the other way and tried to corner the entire market, software and hardware.

Helps to have your only competitor do something that stupid not that Microsoft wouldnt have been a home run anyway.

I'm not a tech guy, so I apologize for not understanding the specifics. However, I fail to see your point. It could be, that I so misunderstood what he was saying that I've completely misinterpreted it. But after hearing him speak, I was left with the distinct impression that his big break came from a project that he and several other people rejected several times. Frankly, quibbling about the details seems like a red herring. To the extent this is the result of my failing to be clear, my bad, sorry.

The luck comes into him being in the right place at the right time and having consequences he didn't intend or consider to be part of the calculus of his decision. Obviously, at some point he realizes the potential and capitalizes. But the point is that it could have been someone else (or no one else). If he ultimately rejects the opportunity and pursues other endeavors, does he go on to being successful (per you definition below)? Almost certainly. Does he go on to create one of the biggest technology companies and topping the Forbes 100 list? Significantly less certain.

I'll give you another example, from the fall of 2008 through most of 2009, tons of people in PE shops and law firms lost their jobs when the credit markets froze. A certain number of these people would have ultimately succumb to the attrition inherent in these career paths, but a good number of them would have stayed on and been very successful. Almost all of them will land on their feet and go on to be successful (again, per you definition below). Some of them will likely be very successful given the size of the pool and caliber of the talent (some will probably benefit from being kicked from the nest so to speak). But if the definition of success was making baseball player bank doing LBOs, then most of those people will not be successful and it wasn't because they weren’t skilled/hardworking/diligent/pleasant/good looking/tall/intelligent/whatever. It just happened that they were in the wrong place at the wrong time.



I essentially agree. I was puzzled by some of your comments, but this seems to clear up my confusion.

That sounds right, from what I remember.

286/386/486/pentium, MS-DOS morphed into windows, NT, XP, Vista, etc. Good memory.

its not quibling, Bill Gates had a programming language but no OS. IBM needed an OS/programming language combo, Gates didn't think it was worth developing one for what IBM was offering, neither did Digital Research. But he had an opportunity to buy an OS that allowed for easily portability and used this to make some money off IBM and expand the market for his programming language, Q-BASIC. After computers became generic his marketshare rose considerably and suddenly having an OS was the strongest asset of microsoft.

It was luck in the sense that OS's turned out to be a golden goose, it was skill in the sense that Microsoft took advantage of an opportunity and positioned itself to be able to negotiate and take advantage of market inefficiencies.

What I am arguing is that you don't have to be at the right place and the right time to become a success.

You just merely have to be constantly out there, grinding it out until the right time / opportunity hits you.

There are so many variables to argue when throwing in the luck word.

Bill Gates was already working his ass off developing software for the Altair. Microsoft was a company of 130 people back then.

IBM approached Bill Gates because he was in the business and had relative success in previous software.


IBM may not have approached microsoft if Bill Gates was just anybody else. Maybe it was because of who Bill Gates / did / say / acted that the deal was made.

Seattle software company was the company that developed DOS. IBM didn't come to them first.


I essentially agree with Henry when he says Bill Gates may not have become the zillionaire he is today, but no doubt he would still have become successful in his own right.

How many zeroes? That's merely a relative answer.


I'm arguing that people with all the traits to become successful don't need luck to favor them as much as winning poker players don't rely on luck to win money. Sure luck comes and goes and helps you win more or lose less. But as long as you are constantly out there grinding it out, the big scores will come.

As far as I know Microsoft never turned down IBM. Digital Research did which was when Microsoft went out and bought DOS from someone else. They then used this mistake by Digital Research to wrestle away market dominance from Digital Research. Back then there were actual two versions of DOS MS-DOS and DR-DOS but Microsoft used pretty much the same techniques they have continued to use to quasi-illegally crush DR-DOS. At least that is how I remember it. I was never a fan of DOS based machine and was a Amiga user long after it was clear that platform was never going to make it.

I'd say less then luck what made Microsoft big was a complete disregard for IP property, competition law, and unethical behaviour.

I don't understand how achieving financial freedom needs to ever include a conversation about Bill Gates or Microsoft.

I really think you underestimate how important it was to Gates' success that he came of age during the foundational period of the PC.

Yes he is brilliant and very ambitious, but he also had an estoteric personal interest that happened to be on the cusp of an explosive growth in commercial viability.

It's not like Gates said "Hmm, I want to be a billionaire, what hobby should I pursue? Oh personal computing looks promising."

And it's not just Gates, pretty much every zillionaire I've seen interviewed credits much of his success to luck. The opportunities to become mega-mega-rich through business are sufficiently rare that it takes a lot of luck to happen on to one even if you are tremendously talented and ambitious.



We can look at this in another way, as a problem of survivorship bias.

I have known ambitious and intelligent people from high school (went a really competitive high school) and college who had the express desire of becoming rich/successful/famous. Tbh I don't keep track of any of the people I have in mind but I doubt any of them is doing anything all that noteworthy. Probably they do have well above average incomes.

If any of them had happened to have the right interests in the right time, I could definitely see them parlaying those interests into a huge commercial success. But they didn't and they haven't.

And if they had I have to conclude that you would argue that they were just realize their life EV, not benefiting from luck in any way.

If you argument is simply that Bill Gates has a high average life EV, I can grant you that. If your argument is that he would have been one of the richest men in the US if he had been born in various slightly different time periods, I think you really don't appreciate how much randomness there is in this world.

The thing is there is always something that is just on the cusp of going big. Had Gates missed the personal computer he would have capitalized on whatever was big when he was growing up. The argument that Gates was good at computers so if computers were not coming up he would have been screwed fails to realize that if radios were the new technology he would have been into radios and found a way to monetize that hobby. If Wayne Gretzky had been born in Western Europe rather than Canada he would have been a football player rather than a hockey player.

Take any ten year period and there is always something new that in that period allowed financial nobodies to build themselves up into multi-millionaires and billionaires to a lesser extent. Maybe not Gates money but we are talking about being successful which I define as a net worth of over $15M and not necessarily as making it to top five richest men in the world status.

Ok this isn’t exactly what I remember Gates saying but it illustrates the point.

Quote:

As the story goes and Mlodinow recounts it in his book, in August 1990, IBM was looking for a programme called "operating system" for their "home computer." A group of executives from IBM went to meet Gates, who was then running a very small company.

Gates told them that he couldn't provide the operating system they wanted and directed them to a programmer called Gary Kildall at Digital Research Inc. The talks between Kildall and IBM did not work out primarily because Kildall's wife and the company's business manager refused to sign IBM's non-disclosure agreement.

Around the same time, Jack Sams, an IBM employee met Gates again. As Mlodinow writes, "They both knew of another operating system that was available, a system that was available, a system that was, depending on whom you ask, based or inspired by Kildall's. According to Sams, Gates said, "Do you want to get...[that operating system], or do you want me to?" Sams, apparently not appreciating the implications, said, "By all means, you get it.""

Sams of course did not understand the implications of his statement.Gates got the operating system for around $50,000 (or by some accounts, a little more), "made a few changes, and renamed it DOS (disk operating system). IBM, apparently with little faith in the potential of its new idea, licensed DOS from Gates for a low per-copy royalty fee, letting Gates retain the rights." And the rest as we have seen is history. There was a lot of luck involved in the success of Gates. If Kildall had co-operated, Gates wouldn't have come into the picture at all.

Also, if IBM had just bought the operating system itself, the situation would have been very different.

From my point of view, Kildall not going forward with IBM and the misplay by the IBM exec was lucky (or whatever term one wants to use) for Bill. Like I said, this isn’t exactly the same story I heard. I’ll see if I can find the speech Gates gave when I have more time.
+1 on the business practices
To me, there is a contradiction in these statements. Statement No. 1 - right time right place doesn’t matter. Statement No. 2 - grind it out until you find yourself in the right time and right place (opportunity). Isn’t the only difference between these two statements that you’ve added ‘grinding it out’ to the second?
Does eliminating luck really cut the number of variables by any meaningful amount? Even if it is a troublesome variable, that doesn’t lead to the conclusion that it isn’t a factor. Either it is, it isn’t or it is sometimes, but not always. It shouldn’t matter that it adds complexity to the analysis.
Although, assuming for the moment that luck is in fact at least sometimes a factor, from a pragmatic point of view, it doesn’t matter because it is by its nature something that you cannot influence/control/predict. And as a result one should focus on things they can influence, control, predict, etc.
I’m not really sure what your point is here. It seems like your saying that Gates positioned himself in such a way that his deal with IBM was inventible. To me, that doesn’t seem to be the case at all.
Using the yardstick that Henry set forth above (i.e. top 20%), I essentially agree. Although, since the top 20% is $100K/yr that leaves room for some huge swings.
I really don’t understand why poker should be used as an analogy for the rest of life. Don’t get me wrong, I think poker is a great game and you can use it to develop skills that carry over into the rest of life. Admittedly, I haven’t thought this through fully, but it seems the biggest role luck will play for a skilled poker player is who happens to sit down at the game with him (some random big fish = lucky; phil ivey = pick another game). Assuming a constant relative edge over a sufficient number of hands, it seems that the luck of the draw should have no impact. For a skilled poker player there are no unknown unknowns at the table, but outside of the card room the unknown unknowns seem to swamp both the knows and the known unknowns.
I'm sure it's a topic for another thread, but I'd love to hear a good discussion of why poker is or isn't a good life analogy.
Sorry, this is probably my fault. It looks like I was interpreting success as something different than what everyone else talking about and the proceeded to open a long tangent.

My longest post ever - can I have a cookie?

how much ''luck'' determines the outcome depends on what level of description you're using when discussing edges. are we comparing the edge one genotype has over another, or are we comparing six year-olds? twenty year olds? thirty-five year olds? we need to know before we can talk meaningfully about the probability of success across domains. genotypes have very wide probability distributions of future skill types and skill levels. six-year olds have smaller ranges. twenty year olds have a smaller ranges still, and so on. i mean, most of the discussion on the topic of ''luck'' is meaningless because no one is talking about the same thing.


this is a hypothesis: the most capable are the most likely to adopt the preferences and cultivate the skills that maximize their probability of capitalizing on novelty.

it is simply wrong. there are more ''unconventional'' preferences, beliefs, and skills than conventional preferences, beliefs, and skills (conventional preferences, beliefs, and skills drastically reduce the probability of wild success and catastrophic failure; see below). i would certainly not argue that all unconventional preferences, beliefs, and skills are equally likely to be sampled by those who deviate from conventionality, but even if you assume that the range is limited by implicit higher-order rules ("conventional unconventional preferences, beliefs and skills", of which ''that which is new'' is one general category) you're still left with a huge number of socially inutile preferences, irrational beliefs, and useless skills to sample.

i think we can predict who is likely to search the space of unconventional behaviors, and probably even distinguish between those likely to search the space of ''conventional unconventional behaviors'' versus ''wacky unconventional behaviors''. i do not think we can predict who will and who wont 'choose' the unconventional behaviors likely to increase the probability of wild financially success.

also, those most likely to achieve ''traditional success'' by becoming lawyers and dentists are definitely not the most likely to achieve ''wild success''. following the ''conventional'' path is a low-risk, medium to high-reward strategy for the highly competent (high 'life EV' at age, oh, 12 given conventional value systems), and it is the one the overwhelming majority of them choose. in the process they reduce the probability of achieving wild success to virtually zero.

almost every kid in canada played hockey. almost no kids in seattle knew anything about computers. if we assume the probability of adopting the preferences of a majority ("i will invest my athletic talents where everone else is investing theirs") is higher than the probability of adopting the preferences of a minority ("i will invest my intellectual talents where almost no one else is")...

also, there is little evidence wayne gretzky would have been a world-class soccer player had he been born in eastern europe. it is obvious there is some general ''athletic factor'' but just as general ''intelligence factor'' doesnt predict extreme domain-specific proficiency, and we cannot take extreme chess skill as evidence of anything more than an above average intelligence factor, we cannot infer from wayne gretzky's world-class hockey skills that he would have been a world-class soccer player had he been given the opportunity.

people are complicated. most skills worth having are complicated. edges at the upper end are tiny and reside in specific places. it is not easy to predict who will become awesome and to what degree very far in advance (high uncertainty).

there are always many things that could potentially allow financial nobodies to build themselves up into multi-millionaires. some people trying to guess which ''thing'' has a higher $$EV will be better at it than others, but there's still a lot of variance. most will fail.

as i suggested in my last post, though, the $$EV of preferences, beliefs, and skills/behavior is, for most people, a minor or incidental feature they are only vaguely aware of when making their most limitative selections/decisions.

It comes down to how you define luck. I think Tien sees it the way I do where just because you end up on the positive side of something it isn't luck if you put yourself in that position so that statistically some such fortunate event would happen.

Not the MS-DOS deal specifically but some deal. Basically the reason luck seems to be such a big factor is because you are isolating one event that happened to the exclusion of many other events that could have happened had that one not happened.


My GF was reading this topic and we actually got into a debate about luck and how to interpret an event where I ran into an old professor in a hotel lobby while getting flowers who offered me a job after he mistook a joke I made for a serious statement. Her position was that it was complete luck that I happened to be in the hotel lobby at the same time as the professor and that five seconds sooner or later the encounter would never have happened so it was luck. While I agree that it was luck to run into him specifically it was my decision to live in the financial district and it was my behaviour that both made me memorable enough to remember eight years later and also someone he would offer a job to. My position was that it wasn't luck since there are enough people who would behave the same way as the professor in a defined geographical area that overlapped where I happen to live and so statistically I should have such an encounter given a normal amount of time and just leaving the house. Any specific encounter has small probability of as a group it is statistically probable so not luck.




{GF here. Henry has failed to mention-- conveniently-- that this old professor was not only at the right place at the right time, he was also four or five hundred km from his home. So it's not like Henry just happened to be walking through the lobby of the building the prof works in every day.}

Quote from Wiki from Malcolm Gladwells book

Gates met the 10,000-Hour Rule when he gained access to a high school computer in 1968 at the age of 13, and spent 10,000 hours programming on it. In Outliers, Gladwell interviews Gates, who says that unique access to a computer at a time when they were not commonplace helped him succeed. Without that access, Gladwell states that Gates would still be "a highly intelligent, driven, charming person and a successful professional", but that he might not be worth US$50 billion.



Are you saying Bill Gates was not lucky to have total access to a computer in 1968? This was an opportunity afforded to almost no one else in the world. Almost all the other Tech pioneers were afforded similar unique opportunities.

positive side means what? >50% chance of success? >n chance, where n is median chance of persons within your demographic? what do you mean?

sophistry!

There was enough interest in computers that his school choose to provide access to one. It wasn't like he independently sought out computers. He was at an elite school that had one. I guess we can define all of these things as luck since had the school administrator not seen the value in computers or had Gates not been chosen to be one of the few students who had access his interest might never have developed. That isn't really luck though -- the school choose a computer over the other options because they believed it presented the best value and Gates was most likely chosen to be one of the students who would use it because he was one of the best students at the school.

Sorry I made a mistake. Sure you need to be at the right place, meaning the right industry. The industry must match your interest as well as must be a growing industry, not a dying one.

But I believe being in the right place is a intellectual choice moreso than just being lucky.

Bill Gates chose to be in the computer industry, and correctly deduced that developing software had a lot more potential than developing hardware. This is business acumen, correctly seeing the wave.

The right time eventually comes for the individual to make their move. How big of an opportunity? That largely depends on the ability / skills / capacity of individual. As well as luck, but I will get into that later on.


I'm saying lucky opportunities are inevitable for the person that is out there every single day grinding it out. It's merely variance. How good those opportunities are is up for lady luck to decide. But frankly that doesn't matter.

It is up to the individual to position themself accordingly (business acumen) and then take full advantage of that opportunity when it comes (again, business acumen).

Who knows what would have happened if Digital research made a deal with IBM.
Maybe Bill Gates would have still worked his ass off to produce another version of Windows and capitalize on the market share? Who knows? He sure as hell would not have thrown in the towel if IBM licensed the DOS software with someone else.

Again, removing one variable that enabled X event to happen ends up producing multiple more variables that must be considered until one can conclusively say "lucky bastard". There is ALWAYS option B, C, D when option A doesn't work. And sometimes in life those options are better than A.


I firmly believe that any entrepreneur / businessman lives and breathes on the lines of variance and that is why luck does not matter (you will inevitably run hot as well as run cold) but that's another topic alltogether.

First of all, Gates was lucky, he had a 3 million dollar trust and came from a well off family with connections. Edit: and the computer thing. and the fact that he bought an OS just before OS's got really valuable

Second, you can be successful and not have financial freedom. Sure Gates did it by having the most money in the world but being successful doesn't = financial freedom, and neither does being average = no financial freedom.

I interpret financial freedom as being able to live within a lifestyle that you're satisfied with, for an indefinite amount of time. I mean we can define it has 'having a crap load of money', but I think that misses the point and then we just start talking about guys like Bill Gates where people don't learning anything useful.

Simple game then, delude self into thinking lower standards of living bring happiness. "Who needs children anyway?!?!?" would make financial freedom a lot easier for almost everyone.