Enter Randomness
Randomness often plays a decisive role in success, as illustrated by the example of actors where many are equally skilled but only a few become famous due to arbitrary factors like an examiner's mood.
THE IDEA
Enter Randomness
Things can become more interesting when randomness enters the game. Imagine a waiting room full of actors queuing for an audition. The number of actors who will win is clearly small, and they are the ones generally observed by the public as representative of the profession, as we saw in our discussion on survivorship bias. The winners would move into Bel Air, feel pressure to acquire some basic training in the consumption of luxury goods, and, perhaps owing to the dissolute and unrhythmic lifestyle, flirt with substance abuse. As to the others (the great majority), we can imagine their fate; a lifetime of serving foamed caffe latte at the neighboring Starbucks, fighting the biological clock between auditions.
One may argue that the actor who lands the lead role that catapults him into fame and expensive swimming pools has some skills others lack, some charm, or a specific physical trait that is a perfect match for such a career path. I beg to differ. The winner may have some acting skills, but so do all of the others, otherwise they would not be in the waiting room.
It is an interesting attribute of fame that it has its own dynamics. An actor becomes known by some parts of the public because he is known by other parts of the public. The dynamics of such fame follow a rotating helix, which may have started at the audition, as the selection could have been caused by some silly detail that fitted the mood of the examiner on that day. Had the examiner not fallen in love the previous day with a person with a similar-sounding last name, then our selected actor from that particular sample history would be serving caffe latte in the intervening sample history.
When to use it
When making hiring decisions, be aware that past successes may be partly due to luck, not just skill.
In personal goal-setting, recognize that outcomes outside your control can affect results; focus on effort and process.
When analyzing historical events or business stories, consider the role of randomness to avoid oversimplified narratives.
FROM THEORY TO EVERYDAY LIFE
In practice
Actors in a Waiting Room
Taleb imagines skilled actors auditioning for a scarce role. A small detail affecting the examiner’s choice starts one actor on a path to fame, which then attracts more attention. The scenario illustrates how chance and reinforcing attention can amplify an initial difference.
A MOMENT TO REFLECT
Put it to work.
Think of a highly successful person you admire. What role did luck or random events play in their journey?
How might your own life be different if a few key random events had gone the other way?
When evaluating a company's success, how much credit should be given to skill versus random market conditions?
CONTINUE THE CONVERSATION
Source texts
- Fooled by Randomness The Hidden Role of Chance in the Markets and in Life (Nassim Nicholas Taleb)