Mar 15

Life is a Game of Skill: In Zero to One is Peter Thiel is Half Right

Zero to OneIn Zero to One Peter Thiel states that your life isn’t a lottery ticket and goes on to make the case that skill and not luck is behind great achievements. And while I agree with a lot of what he says, I don’t believe that luck and skill are mutually exclusive. A game of luck is one in which you can’t lose on purpose; an example is a lottery, once you’ve bought the ticket there is no way for you to lose on purpose. Contrast that with a game like poker where one can lose on purpose if one wishes.

By that definition, your life is a game of skill.

So in this I agree with Thiel, but it is the next step where I believe we part ways. In his book he argues that skill is the dominant factor and he stories about people like Elon Musk and Steve Jobs to back up this claim. He also mentions people who believe luck is dominant; after mentioning folks like Bill Gates and Warren Buffet he decides to ignore their opinions that luck plays a large factor. Without taking anything away from the brilliance of the people who believe skill is dominant, I think it also behooves us to recognize that good timing and luck also play huge roles in their stories. Skill and hard work can make you a millionaire, to become a billionaire you have to get a bit lucky.

I see two benefits to this worldview, the first is that it says that hard work is rewarded and we can take credit for some of our success, but it also tells us to be humble around our greatest achievements since there are probably external factors that have helped us along.

Oct 09

Viral Loops: a Love Story

Over at TechCrunch guest blogger Adam Penenberg as put part of his new book Viral Loops up. It is the story of how Tim Draper got the viral loop into Hotmail. Given that investors love to see viral marketing theses days it is nice to see that one of the earlier loops was brought about by VC. 

At the next meeting at DFJ Tim Draper once again pushed the two young
entrepreneurs to insert a tagline into each message. Bhatia and Smith
were adamant about not adulterating email. It just wasn’t done. They
would feel like they were polluting emails with advertising, and what
about privacy issues? If someone is adding a tagline what else were
they doing? A user would wonder what else they had access to and they
were also fairly certain it was unethical. But Draper wouldn’t let it
go. The benefits, he contended, far outweighed the risks. If they were
predicating their entire business on the size of their user base, they
should be doing everything in their power to increase it as fast as
possible. “P.S. I love you. Get your free email at HoTMaiL.” The more
he said it, the more he liked it. (via TechCrunch)

Apparently this story was under contention for a while until the authors of Founders at Work dug up some corroborating evidence. So here is at least one case where the VC really did contribute more than just capital.