The luck-skill continuum

Interesting new framework I learned today: the luck-skill continuum. Sahil Bloom was talking about non-obvious traits of winner, in particular, how they can tell what’s luck and what’s skill:

Common Trait: Differentiate Luck & Skill

Humans are storytelling creatures.

But our stories are flawed. We are notoriously bad at differentiating between skill and luck.

Stories of success tend to downplay the role of luck; stories of failure tend to overplay the role of luck.

Average performers think like this:

• Good outcome? I’m a genius.
• Bad outcome? I’m unlucky.

Top performers have an understanding of @mjmauboussin’s luck-skill continuum.

They identify where an activity or outcome exists on it and adjust future actions accordingly.

That luck-skill diagram definitely got my wheels turning. It got me thinking:

Where does entrepreneurship/indie hacking lie on the continuum?

My guess is somewhere near the stock market, leaning more to the left half of the continuum. Because unlike how media channels love to portray success stories, most startups fail. And often not due to lack of funds or talent, but just external, environmental conditions. That is, luck.

What I loved and learned from the tweet and framework:

• know where your domain lies on the continuum, and adjust your efforts, hacks, ideas accordingly
• if more skill-based, showing up daily, learning new skills, being consistent in habits, compound your 10k hours of daily repetitions into skills. Progress > perfection. Conviction behind your passion.
• if more luck-based, take more chances, more shots on goal. Yes you might need some skills, but in lesser proportion compared to taking shots. More bets, less reps. 10k iterations > 10k hours. Less conviction, less one-track pursuit of success, more openness to other tangential opportunities that appear randomly.
• the danger is in mistaking what’s luck-based as skill-based, and vice versa. Hunkering down to develop good routines when it’s more due to chance would only lead to lack of results. Jumping from one random opportunity to another seeking luck when it’s actually skills-based, becomes just shiny object syndrome. Both end in frustration.
• anytime I find myself saying to myself “I’m a genius” to a good outcome, or “I was just unlucky” to a bad outcome, I’d better to double check my references.

What else did you glean from this framework?