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Re:The difference betwen skill and luck. by jacques_chester on Wednesday February 09, 2011 @10:56PM (#2200687)
I am reminded of an anecdote of a famous physicist talking to Army personnel during WW2. Unfortunately I cannot find a reference with various keywords on Google, so take it as you will.

Somehow conversation turns to the great generals -- the 4 and 5 star generals.

"How many great generals are there?" asks the physicist.

"No more than about 1 in 20 is a truly great general", they answer.

"How do you decide who is a 4- or 5- star general?" the physicist asks.

The army men decide that you need to have won 5 battles to be a great general.

The physicist then explains how it can easily be luck. Suppose that battle success is randomly determined. A general has a 0.5^5 chance of winning 5/5 battles out of sheer luck -- 3.125% in fact. Therefore the majority of "Great Generals" are just lucky.

Re:The difference betwen skill and luck. by jonpaul on Wednesday February 09, 2011 @11:04PM (#2200718)
That makes about as much sense as saying: pick two sports teams to play each other, the odds of one of the team winning is 50%. The point is, that probability doesn't hold, and thus nullifies the anecdote.
Re:The difference betwen skill and luck. by jacques_chester on Wednesday February 09, 2011 @11:15PM (#2200742)
I didn't explain it very well.

The point of the anecdote is that the null hypothesis -- that 5-star generals are there basically because somebody "wins" each battle and that a fixed percentage of these will win 5 in a row -- is difficult to distinguish from genuine tactical skill.

That's the point of the article too. We too often attribute to skill what can just as reasonably be luck. Partly because of survivor bias: Zuckerberg et al are the one group out of the hundreds of contenders who succeeded in getting runaway network effects. But if contenders had non-zero chances of success, somebody was bound to succeed. The null hypothesis is that Zuckerberg was just lucky and it is basically not easy to disprove, given that as I said above there's nothing particularly unusual about him or Facebook going into the fight.