Sometimes, Success Looks a Lot Like Failure
Or, hyperspecific lessons is the greatest cause of being fooled by randomness
đ Hey there! My name is Abhishek. Welcome to a new edition of The Sunday Wisdom! This is the best way to learn new things with the least amount of effort.
Itâs a collection of weekly explorations and inquiries into many curiosities, such as business, human nature, society, and lifeâs big questions. My primary goal is to give you some new perspective to think about things.
A request: If you like this essay, could you do me a favour and hit that đ¤ heart so that it becomes a â¤ď¸ heart? This helps me understand what kind of topics I should write more about. This also signals Substack that more people should read this essay.
Q: Are there universal lessons on success?
The Bollywood classic Munna Bhai M.B.B.S follows Murliprasad âMunna Bhaiâ Sharma (played by Sanjay Dutt), a goon who tries to please his father by pretending to be a doctor. When Dr. Asthana exposes Munnaâs lies and tarnishes his fatherâs honour, Munna vows revenge and cheats his way into enrolling in a medical college. Boisterous fun follows as Munna finds out later that Asthana himself is the dean of that college.
One of the core messages of the story is to befriend your patients. Asthana strictly believes that doctors arenât a patientâs friends. Any kind of sympathy or emotion would make them weak and interfere with their work. While Asthana has become a successful surgeon by treating his patients as sick bodies, Munna shows a different approach â healing them through love and support.
While itâs a nice message, I always wondered if itâs practical. I mean, on one hand it makes sense â having emotions can make you less efficient as a doctor. On the other hand, it also gives you skin in the game. It can make you go the extra distance.
Today, letâs talk about the dual nature of business lessons. More precisely, letâs talk about why thereâs no one clear school of thought, strategy, advice, framework, for business success.
So much of success relies on your ability to learn. But learning that begins with good intentions can quickly backfire, because what causes something to fail or succeed is often specific to one scenario and canât be extended to others.
Coca-Cola focusses on making a drink that looks as classy as wine, and tastes refreshingly sweet. Red Bull became successful by selling a drink that âtastes like pissâ (as one customer said), and nobody knows (or even cares) how it looks like â as long as it gives you wings.
Warren Buffett got rich by focusing on long-term businesses. George Soros got rich by obsessing over short-term fluctuations.
While the opposite of a good idea can also be a good idea, a lesson on how to become successful can also result in absolute failure.
So, what do we do about it?
Take the two following books: Talent is Overrated and Range. While the first is about putting your head down and practising your ass off, the later is all bout becoming a generalist.
Both are immensely successful, both are full of successful examples, but both take completely opposite views on what it takes to be successful.
The more complicated something is, the harder it is to determine cause and effect. So you can imagine how difficult it is to determine cause and effect in business and investing.
The traits needed for success are also the traits that get people into trouble.
Amazon became successful by ignoring the pursuit of profit and by focussing on revenue growth at all costs. This attitude is what generally crushes every other company.
Not everything is as black and white as cause-effect and effort-result. Outcomes are not only context-dependent, a lot depends on randomness as well. Two similar business, situation, market, decision can often lead to a completely different outcomes.
Thereâs a non-physics corollary to Newtonâs Third Law of Motion: For every lesson on why something works, thereâs an equal and opposite lesson on why it doesnât.
Success requires forgoing conventional wisdom, but forgoing conventional wisdom also dramatically increases the chances of failing.
Nobody in the right mindset would think of building a private space exploration company to compete with NASA. Nobody in the right mindset would consider becoming the CEO of multiple billion dollar companies, let alone multiple small businesses. This is against conventional wisdom. When you are successful by following this, you become Elon Musk. When you fail, you are just plain old stupid.
Thatâs why itâs so hard to really know whether a company is brilliant or stupid based on just outcomes. Whatâs even harder is extending those lessons to other businesses â because so much of what happens at one situation is specific to that situation and that business, not to mention driven by chance and odds that could have gone a different way.
We often wonder why founders and investors never learn their lessons, especially after a bubble bursts. People do learn lessons. They just interpret them too specifically.
The result is that we often think weâre learning lessons to apply to the real world, but we may just be observing randomness thatâs unique to one event.
For example, investors didnât learn to stay away from hype and blind greed after the 2008 financial crisis â which was the real lesson. They learned to stay away from subprime bank stocks, which was a hyperspecific lesson. This probably wonât do them much good in the next crisis.
This doesnât mean we shouldnât analyse successes and failures. But in a complicated world, learning hyperspecific lessons is the greatest cause of becoming fooled by randomness.
The takeaway from Munna Bhai M.B.B.S isnât to become completely emotional about your patient, or not build any kind of friendship so that you can be a âgoodâ doctor. Itâs to look at the big picture: help them get better. Since, getting better is both about body and mind, you need to be a bit of both â endearing and rational â as long as one doesnât affect the other.
The way to be successful in wicked domains isnât to drill down deeper â itâs to pull back and look broader. What are the things that remain true, not matter the outcome? Itâs usually got to do with human psychology. Itâs usually about how people fool themselves; how culture creates a creative space; how gullible, greedy, or impatient we are; how we respond to stress, change, surprise, and failure; how our ego gets in the way; how competition blindsides us, etc.
The rest is details.
Timeless Insight
The little choices you make everyday donât hurt you. A candy here, a cigarette there. But humans have a tendency to lose track of how these everyday small choice turn into habits, and how these little habits add up quickly into big unintended mishaps.
If you make an unnecessary $4 purchase every day, you spend over $1,400 per year. Anyone who spends $1,400 in one go would have a strong reason for the crater in their pocket. But spending money a little at a time on small indulgences means you canât even point to where your money has been going.
Much of the current confusion and distress surrounding environmental issues can be traced to decisions that were never consciously made, but simply resulted from a series of small decisions.
What Iâm Reading
Cancer is an expansionist disease; it invades through tissues, sets up colonies in hostile landscapes, seeking âsanctuaryâ in one organ and then immigrating to another. It lives desperately, inventively, fiercely, territorially, cannily, and defensivelyâat times, as if teaching us how to survive. To confront cancer is to encounter a parallel species, one perhaps more adapted to survival than even we are.
â Siddhartha Mukherjee, The Emperor of All Maladies
Tiny Thought
Bad-mouthing is the only genuine, never faked expression of admiration.
Before You GoâŚ
If youâre finding this newsletter valuable, share it with a friend. Also, consider subscribing. If you arenât ready to become a paid subscriber yet, you can also consider buying me a cup of coffee.
Iâll see you next Sunday,
Abhishek đ