Wednesday, April 24, 2013

How differences are built up over time

I sometimes wonder why there are so many differences in capability, power and wealth between us. We all are human being having almost similar physical and intellectual power and capacity when we are born. But forty years down the line, some become super wealthy or win noble prize whereas some continue to struggle doing some mundane work.

Where and when we are born help. Per Warren Buffett he was very lucky to be born as a white american male. It gives tremendous competitive advantage if your parents are educated, rich and well connected. And it is extremely difficult to be successful if you are born poor and need to struggle for even the basic life needs. But every rich kid cannot make it even though he is at advantage. What are the other factors? I believe there are two other critical factors to success – mentoring and continuous improvement. It takes time to become really good at something (ten thousand hour rule). You learn things by practicing over time through trial and error. But proper guidance and coaching can make a big difference as well. A good coach can teach critical skills which takes years to learn by trial and error. Also a good coach gives confidence, helps to keep the focus and to dream big. You need to believe in yourself to become successful.

Let me give an example. Two friends start at the kindergarten – both having almost same potential. One kid gets better attention and guidance from his parents and makes it to a better high school and then to a better college. Better college ensures better classmates – better connections make better opportunities and the peer exchange of ideas increase productive capacities.  Over the years the magic of compound interest makes a huge difference and the two childhood friends cannot believe their gaps.

Success is rare as it needs time and multiplicative impact of so many positive factors. Remember it is not addition – it is multiplication. So you have always the fear - one low score and you are out of the game. Are you feeling hopeless? Let's not be so pessimistic. Yes, it is difficult to fight if you had a bad childhood or had a bad year in college. But remember multiplication has its own advantage as well. Continue the good work and you can find something big positive which can help you overcome all your shortcomings. Yes, miracles do happen - so continue to fight till your last breath.

How can you become successful at your career - I believe there are two ways. Either go conventional crowded path of corporate career and do smart+hard work for years. Or find some path where nobody is going(yet) - being an early adopter of some future profession has extreme competitive advantage. So keep your minds open, take risks and work hard+smart at the same time.

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