Why all the love for business figures who effectively won the lottery?

Great Debates
1

By that, I mean guys like Mark Cuban and Mark Zuckerberg, both of which effectively won the lottery- Cuban literally got lucky and sold the moderately successful broadcast.com for a wildly inflated price during the height of the intenet boom, and Zuckerberg was in the right place at the right time with the right product, which wasn’t even all that amazing. Facebook basically took off because it was the MySpace for non-ghetto people, not because it was really that superior.

Yet people talk about Cuban like he’s some kind of business wizard, and quote Zuckerberg like he knows more about the tech industry and business than say… Steve Jobs or Larry Ellison, much less guys twice his age who are also successful, but not quite so rich.

Contrast this with people like Warren Buffet, who’s built his fortune the long way, and is a billionaire by virtue of skill and tenacity instead of large scale good fortune.

I don’t get it; I don’t give a damn what Cuban or Zuckerberg have to say; they don’t have a proven track record in my eyes (especially Zuckerberg). Cuban has some experience, but most of it is post-billionaire experience, which makes it a lot easier to take risk.

2

I don’t know if that is a GQ, but I would assume a couple of reasons play a big role.

  1. We are a meritocratic society that believes (rightly or wrongly) that wealth is a sign of good character. So if you have wealth you must have good character traits, if you are poor you must have bad traits.

  2. Authoritarians tend to grovel to the powerful (the military, the police, corporations, the rich, lobbyists) and feel contempt for the weak and disaffected (gays, blacks, the poor, workers, etc) and those who defend the weak/disaffected. So that would be an extension of that.

3

I’ll agree with the aforementioned

  1. People want to believe that rich people deserve it, because they want to believe that life is fair [both because they want to believe that their own wealth is deserved, and because they don’t want to have the moral obligation of fixing an unfair society]

  2. They don’t care about fairness; they’re just happy to suck up to anyone with money and power.

I’d add

  1. They don’t realize how much luck is really involved in most cases of striking it rich;

or

  1. They focus on the hard work that’s in most cases required to strike it rich (rather than the luck that is also required); I mean successfully selling for a wildly inflated price at least requires the ability to convince the overpaying sucker. More importantly, it requires building something to sell in the first place.
4

Bill Gates, OTOH, was lucky and capable. His first BASIC he wrote and compiled by hand because he did not have access to the right computer. He hand-punched it on a paper tape and took it to a trade show, where it ran first time. That’s incredible, espcially compared to anytihng I ever wrote… :smiley:

Read Malcolm Gladwell, I think it’s in “The Tipping Point”. He discusses the “born at the right time” phenomenon. People who made it big not only had the smarts or drive, they also lucked out in the right timing. His example is the predominantly Jewish lawyers who got rich in the take-over frenzy starting in the 1960’s. They had the advantage of an education fueled by talented teachers - back when NYC high schools meant quality, the teachers in any time other than the depression would have become university professor; but ther were no openings in the 1930’s. They were excluded from the “good old boy” clubs of the traditional corporate lawyers because of ethnicity, so went into alternative business law options. When the good old boys declined to participate in vicious takeovers because “us folks simply don’t do that to each other”, they found their opening and multi-million dollar opportunities.

So every success story, probably including Buffet, has an element of coincidence, and convenient timing. Bill Gates got his 10,000 master craftsman training in computer programming because the parents group of his (private) high school bought computer access for students. But he had the dedication to spend every waking hour working on it… There was a time to get rich with internet startups, with Wall Street takeovers, with real estate options, with computer stock trading, with building computer hardware or even like Ford, building cars; when knowledge, dedication and hard work would combine with fortuitous timing to mean that you could start something in a garage and become the second-richest man in America.

How do we know if/when/how/why Facebook won when others did not? Was starting it with an Ivy League user base deliberate choice or lucky choice?

There are a number of examples of bad timing and bad decisions, failure to seize the initiative, killing what should have been a slam-dunk: Visicalc, Lotus 123, Wordperfect, PalmPilot… Today, Blackberry. These all are losing to something bigger, better, faster…

5

I know little about Cuban or Zuckerberg, but just because they got lucky doesn’t mean they aren’t also talented and energetic. In any field there will be people who work hard, people who get lucky, and people who do both, and you can guess who the winners will be.

I find it interesting that you mentioned Warren Buffett as a person who built his fortune with “skill and tenacity”. Buffet is an investor, i.e. he provides capital so that other people can do things, and then he skims a little off the top if it goes well. That is certainly an important function, but given a choice between losing the Buffetts and losing the Zuckerbergs (who actually wrote the code himself for Facebook), I would keep the Zuckerbergs and lose the Buffetts, and I suspect Buffett himself would agree with this. I’d trade any ten bankers for one Gates, Jobs, Hewlett, Packard, Ford, Wright, Bell…

6

To be fair, I wasn’t really trying to put down Cuban and Zuckerberg, but rather understand the (IMO) exaggerated adulation that many news outlets have for what they do and say, despite the fact that if they weren’t billionaires predominantly through luck, nobody would give half a damn what they thought.

In the case of Mark Cuban, had he sold broadcast.com 5 years before or after he did, it wouldn’t have got him the money it did, because the market would never have valued a website in that way. That’s not to say that broadcast.com wasn’t innovative, but it wasn’t so innovative that it was worth what Yahoo paid Cuban for it.
My bringing up of Buffet was because he’s in the same personal wealth bracket as the other two, but didn’t get the majority of his wealth in a very short period, or from a single transaction. Even though he’s an investor, he’s done it very well for a very long time which isn’t something you can say yet about the other two guys.

7

The book was “Outliers.”

8

It doesn’t mean they are either. Is there any proof what either of them did makes them talented or deserving.

You could also say the same thing about celebrities. Why do so many mediocre people make it, while I can go to a bar in Bucktown and hear a singer that is 100 times better.

Why does someone less talented get a job and you don’t simply because the interviewer liked what he said more?

You could extend this to virtually anything. Success usually is about being in the right place at the right time.

Look at Apple’s Newton, that was a device ahead of its time. I was watching Burns and Allen on Antenna TV a week ago and George Burns inventions include diet beer and frozen yogurt. The audience laughed at the thought of those things.

9

Whether someone is talented or deserving is a matter of personal opinion. We’re talking about success here. It’s an objective fact that Zuckerberg is successful.

Assuming people are free to use or not use Facebook or any other product or service, success at least indicates a person has met the needs of other people. You may not think Zuckerberg deserves to be paid, but a lot of other people do. I am not saying you are wrong and everyone else is right, just stating the objective situation.

People at the top in a free market generally had to provide something many, many other people thought was valuable, so in that sense, I believe most of them are deserving. In an authoritarian society you only have to please the ruling elite; it doesn’t matter if you piss everyone else off. So you get charlatans like Lysenko.

10

Cite? Especially the Steve Jobs part.

11

I would like to believe that some bright idea of mine can pay off. I would like to think my hard work could benefit me. I would like to think that I can actually improve my standard of living using these means.

When someone else does it, it affirms this desire and belief that I cn affect my [financial] future in a positive way.

I am not jealous of Gates, Buffet, Trump, or anybody else who are “self made”. But I admire some of the things they were able to accomplish, because it keeps the dream inside of me alive that maybe, some day, I can “make it” too.

Does this help any?

12

Cuban’s bright move wasn’t getting the billions in pretend internet money, it was in getting out of it when he did and turning it into real money.

13

Excuse me? WHO treates Mark Cuban and Mark Zuckeberg as god-like geniuses?

And since WHEN does Warren Buffett not get all kinds of adulation?

Does Barack Obama cite Cuban and Zuckerberg in support of his economic proposals, or does he cite Warren Buffett? Is Mark Cuban the guy writing countless op-ed pieces on tax policy, or is it Buffett?

Now, ARE there businessmen who’ve been held up as heroes or geniuses for no good reason? Sure- Lee Iacocca wrote a best selling book and was widely hailed as a brilliant businessman, when his only real accomplishments were running Chrysler into the ground and then demanding that the taxpayers bail him out.

14

I don’t think it would be possible to do a worse job summarizing Lee Iacocca’s career.

15

Actually Cuban genuinely did just get lucky. He didn’t start Broadcast.com, they brought him on like a few months prior to the sell to Yahoo. They couldn’t pay him much so they offered him a lot of stock, which was mostly worthless right then. No one, probably not even Cuban, saw what was coming. So Cuban literally did just walk in as a relatively inexperienced guy to help some friends startup, and before anyone knew it he was a billionaire.

Zuckerberg wasn’t original in his idea but he the idea rarely has to be original, Zuckerberg did actually do all the hard work of turning the idea into a real nucleus of a business–and that is hard. Those twins that just had the general idea genuinely can’t claim they did as much as Mark Zuckerberg.

16

If you can paint Chrysler as a great American success story, I’m all ears.

17

The GQ answer is because they have what we want to have/be. Most of us are working schlubs who can only dream of fabulous wealth, but we’ve all had ideas of a product or a service that could make us wealthy. These guys actually pulled off what we dream of doing.

So maybe if we listen we might learn something?

I’m not saying it’s infallible, but if you are a recently divorced 35 year old alcoholic living in a tent, and you hear a story about a 40 year old guy who is a billionaire and that just five short years ago, he was a recently divorced alcoholic living in a tent, wouldn’t your ears perk up a little?

18

I didn’t say that Chrysler was the great American success story. I said your summation of Lee Iacocca’s career was ignorant as hell.

19

Then by all means, set me straight.

Iacocca undoubtedly had strengths, talents and virtues- complete idiots don’t get to be CEOs of major corporations. And given the state of the world and the auto biz in the Seventies, even an utterly brilliant man would have had a hard time.

Even so, whether it was his fault or not, Chrysler went to Hell during his term as the boss, and they didn’t START making great cars under his leadership. Maybe it took a phenomenal effort just to keep the company from collapsing entirely.

I’d STILL say it takes some gall to write a self-aggrandizing autobiography when your company is still making mediocre cars, is still treading water financially, and would be history without a big govenment handout.

20

I personally think it’s a bit unfair to equate Cuban’s and Zuckerberg’s success to luck. There really is no such thing as luck. If they were “lucky” as you claim, then they were smart enough to be in the middle of the street when the luck truck drove by and hit them. It’s not like they were sitting on their asses surfing the internet and Ed McMahon knocked on their door. They were each taking risks, putting up their own capital to start businesses that someone else valued. That’s hardly luck.