Work + Skill + Luck + Risk = Big Success

barking

A new book called Barking Up the Wrong Tree by Eric Barker promises to reveal surprising facts about what really determines success. The publicity tour has generated several articles about how high school valedictorians are less successful than you might think:

Beyond the clickbait, what really happened? I haven’t read the book, but I did learn that Dr. Karen Arnold of Boston College tracked 81 high school valedictorians and salutatorians for 14 years after graduation. Here are some of the findings of this study:

  • 95% went on to graduate college.
  • The average college GPA was 3.6.
  • 60% went on to receive graduate degrees.
  • 90% were in professional careers.
  • 40% are in highest tier jobs (not exactly sure what this means).

Apparently, none of the subjects became billionaires or “changed the world” in a meaningful way. Why not?

The theory is that high grades are a product of conformity and obedience, while being “successful” is about mastering a unique skill and non-comformity. Research has found that high grades are only loosely correlated with intelligence. In addition, out of a survey of 700 millionaires, the average GPA was only 2.9. If you are devoted to a single passion, it can be hard to have good grades in all subjects; thus you tend to struggle in high school.

My question is – How you define “success”? If it’s a respectable career with above-average income, it seems that being valedictorian gives you a much higher chance for that. There’s a reason why many parents want their kids to get good grades and become an engineer, doctor, accountant, or lawyer. You are playing the odds. There are many starving artists and writers, but not many starving nurses.

If “success” is becoming a billionaire, then yes it seems that being a valedictorian may not match up with that. If you want to get rich quickly, you’ll need to start your own business and take some sort of ownership stake. The richest people all own something – music copyrights, book copyrights, businesses, real estate, something.

The difference is taking risks. By definition taking a risk means there is the chance of failure. A small business can make you rich, but most small businesses end up failing. However, you’ll only get graduation speeches from the winners. This is called survivorship bias, as this XKCD comic explains:

survivorship_bias

There is no direct formula for success, but you can still break it down into the required parts:

Work + Skill + Bad Luck + High Risk = Failure + Experience

Work + Skill + Good Luck + High Risk = Success + Experience

No Work + Good Luck = Failure

The takeaway is that you need hard work, valuable skills, taking a risk, and some luck. Luck plays a role, but you need the other three or you have no chance at all.

If you can be a high school valedictorian, I feel you are able to do hard work and thus have the ability to develop valuable skills. That’s a good base. The difference is… will you take the risk? Will you risk putting all your time and energy into developing a skill or a company that may or may not result in something valuable? Will you accept that chance of failure? Or would you rather go with the odds and do something with more reliable results? Perhaps statistically valedictorians take less risk than other groups.

I plan on advising my kids to take calculated risks when they are young and can devote 70 hours a week to a single task. That’s possible when you aren’t taking care of your kids (or your parents). However, I would also teach them that a reliable stream of above-average income plus a high savings rate equals financial freedom, aka early retirement in 10-20 years. (Getting rich via ownership just accelerates the process even further.) Once you have that financial freedom, you can do whatever you want with your life. Start a charity, write a novel, spend time with family, travel the world. Living a lifestyle aligned with your values certainly sounds like “success” to me.

Comments

  1. I agree with the general point being made here. My take on this (not having read the original source) is that one must recognize when a plan is failing and then change course. Risk is largely about the ability to adapt when an environment sours. Those with a strong academic focus (e.g., valedictorians) tend to seek acceptance within their comfort zone (i.e., schools) and do anything to avoid failure. Some literally have never taken a risk that would risk actual failure — they therefore “adapt” by merely working harder and never rethink the root assumptions of their life-path, career, or how the world might function.

    There is a middle path. I’m on it more or less. While my educational history is close to that of a valedictorian, my work history involves two or three different industries and developing substantially different skill sets. I take risks by building out from what I know and consciously challenging my own assumptions — braiding in the new with the old. I’ve left jobs after seeing the likely (boring but stable) career path; and left jobs that were taking me in the wrong direction. Some periods of employment have been dead-ends or disasters (despite getting paid well), but I took what I learned to next opportunity, or used it years later.

    Luck = keep trying until you find an environment that works for you, and be aware that it might dissolve overnight…

  2. Saved the best for last — “Living a lifestyle aligned with your values certainly sounds like “success” to me.” Well said.

    Great post. Socio-economic status is another variable here . . . especially in a world where Education is more segregated by class than it has ever been. This, of course, shows up in the quality of schools and thus the quality of valedictorians. Our ‘jargony’ world in education and elsewhere has started to call this ‘grit’. But having come from (and worked in) low-income schools, I still don’t think that describes it well. I’ve known many a student who has worked hard, had great skills, gotten some luck here and there, taken risks, and even had success . . . but they are still lost in a struggle. Struggles of purpose, meaning, place . . . . etc. SES is more than just economic, it’s become cultural . . . you raise important issues here . . . bravo!

  3. Based on your summary (not having read the book) I think I see at least one other thing wrong: 81 people is a very small sample size! Only a very very small fraction of people are going to become billionaires or “change the world” (whatever that means)

    Only a small proportion of people are going to be high school valedictorians. Let’s say changing the world is randomly distributed. Then you’d expect to see less high school valedictorians changing the world, just because there are less of them!

  4. Your average professional gambler doesn’t win the lottery.

    If 90% are in professional careers then I’d certainly call that successful. And contrary to the one article title I don’t see anything saying they aren’t millionaires.
    I’m not sure what the books definition of successful is really. One article says : “the great majority of former high school valedictorians do not appear headed for the very top of adult achievement arenas” and I also see the word “eminence” used. What does ‘very top’ mean?

    Is anyone expecting a random HS valedictorian to end up a billionaire or the president?
    Among the billionaires how many inherited large sums or at least were born in to very affluent families? Do rich kids have high motivation to study very very hard to be the #1 student in high school?

    Here is a short list of successful valedictorians :
    Jodie Foster, Bette Midler, Kevin Spacey, Conan O’brien
    I’m sure theres many more.

  5. other valedictorians :
    Lloyd Blankfein is CEO of Goldman Sachs and a Billionaire.
    Hector Ruiz former CEO of AMD
    Michael Pryor CEO of Trello

  6. I like the general idea about risk-taking and conformity here.

    What I will say about this book, as a somewhat recent college grad, is that from my research most very rich people go to college, and a 2.9 gpa is not really sufficient to get into a very good college these days. I went to a public university, albeit a good one, and even my high school gpa of 3.5 got me waitlisted in 2009 when I applied. With today’s admission standards I imagine tomorrow’s Forbes list will generally have a higher GPA than today’s Forbes list.

  7. Moe Howard says:

    Can’t speak to validity of the data but I think everybody knows who their valedictorian was and at some point asked someone “What ever happened to so in so?”. My class valedictorian didn’t finish college which doesn’t really mean anything but interesting. I was a 2.9 GPA guy, did ok. Not quite a billionaire, about $996,000,000 short.

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