Once upon a time, while surfing the interweb, I was served a tweet recommending a book called The Formula: The Universal Laws of Success. I knew the tweeter to be a thoughtful guy so I clicked the link.
Then, on the Amazon page, I saw Nassim Taleb, author of The Black Swan, had given the book an endorsement. Anyone who follows Nassim will know that he is generous with his criticism and sparse with his praise.
I’d never heard of Barabási before or read any of his previous work. Which is to say, I had no direct experience of the quality of the man’s work. And yet, the combination of those two endorsements was somehow strong enough for me – I bought the book.
I belabor the details of my purchasing decision because it is just the kind of seemingly inscrutable process that Barabási tries to shed light on. Why did I buy the book? My interest in the subject matter was tickled, and the endorsements fueled my decision. In the case of this book, two recommendations were enough. But would one have sufficed?
Barabasi’s work tries to answer questions like this and others that seek to untangle the web of performance, quality and social cues on the outcomes we see in the world. Questions like:
- What is the value of a single positive review?
- How much does attending an Ivy League school contribute to one’s success?
- Is a social media influencer who pays for followers wasting resources, or do they possess hidden knowledge?
In The Formula, Barabási distills his findings into five distinct “laws”:
- Performance drives success, but when performance can’t be measured, networks drive success.
- Performance is bounded, but success is unbounded.
- Previous success x fitness = future success.
- While team success requires diversity and balance, a single strong individual will receive credit for the group’s achievements.
- With persistence, success can come at any time.
One of my favorite examples of these laws at work is the story of famed artist Jean-Michel Basquiat and his lesser-known collaborator, Al Diaz. Both were talented artists, but when objective measures of success were absent, the social network and external factors played a significant role in determining their respective levels of recognition.
The disparity of their success highlights the importance of networks and social connections when performance cannot be objectively measured. In the art world, where personal taste and subjective factors heavily influence success, it was Basquiat’s relationships and connections that ultimately propelled his career. He was able to forge connections with influential figures in the art scene, such as Andy Warhol and gallerist Annina Nosei, which significantly boosted his visibility and reputation.
On the other hand, Diaz, despite his talent, did not obtain the same level of access to influential networks. As a result, his career did not reach the same heights as Basquiat’s. This example underscores the first law in Barabási’s book: Performance drives success, but when performance can’t be measured, networks drive success.
In cases like Basquiat and Diaz, where there is no objective measure of success, an individual’s position in their network and the strength of their connections become critical factors in determining their achievements.
Diaz and Basquiat
Performance is a Rare Case
All of Barabási’s laws were intriguing, but for me, it is his second law that continues to assert itself as a valuable lens through which to examine our modern world.
The second law states that, performance is bounded, but success is unbounded.
In essence, there are numerous fields where our performances are quite similar but our sucess is not.
In fact, one of the key insights from the book is that true performance measurement is more of a special case. It’s far more common to find competitions where performance can be measured, but to a limited and imperfect extent. But even in those rare cases where performance can be measured, the results we receive from them are highly dispersed (more on this later) and as soon as we move away from domains where performance can be measured precisely, things become fascinating rather quickly.
Barabási provides examples of wine tasting and classical piano competitions as areas where either performance is bounded, as in the case of piano competitions where everyone plays the piece flawlessly, or our ability to distinguish between performances is limited, as with wine tasting, where people can’t consistently agree on superior wines.
In the world of wine tasting, Barabási argues the evidence suggests that high-level performance is not possible to measure objectively. In fact, expert tasters consistently hold diverging opinions on the quality of a particular wine, leading to success being driven more by social factors such as reputation, networking, and marketing. In this case, the actual performance of a winemaker is often not the determinant of their success. He writes:
“It’s not as if the judges were ignorant amateurs – they are the top wine tasters of the world. Yet, in the face of such remarkable inconsistency, you may wonder how we can trust any of their opinions. Indeed, if these judges can’t agree with themselves, how can we expect them to agree with one another? In wine competitions, they don’t. In 2005, Robert Hodgson, a statistician at California State University, analyzed the results of sixteen major U.S. wine competitions and found that ‘the probability of winning a gold medal at one competition is stochastically independent of the probability of receiving a gold medal at another competition.’ In other words, winning gold at one competition doesn’t increase your chance of winning a gold at another.”
Barabási, The Formula: The Universal Laws of Success
These are areas where our intuition tells us that performance should matter, and it does, but it doesn’t determine the winner. In such cases, we decide the winner based on other subjective criteria.
Success is Distinct from Performance
In our minds, success and performance should be linked, which is why we seldom differentiate between someone’s success and their performance. For Barabási, however, they are two very distinct and measurable concepts, each with its own unique properties.
Success is, by its nature, a social phenomenon, with its rewards contingent upon the dissemination and utilization of information among people. In the age of mass media and social networks, this as become an even more exponential phenomenon.
This distinction between performance which is linear and success wich is exponential aligns with Nassim Nicholas Taleb’s framing of the transition from linear to exponential domains as moving from Mediocristan to Extremistan. As we move away from areas with objective performance measurement, the interplay between performance and networks becomes increasingly crucial.
Consider the example of tennis players from Barbasi’s research. Tennis offers a relatively objective measure of performance through rankings, win-loss records, and head-to-head matchups. However, even in such a performance-driven domain, success is often influenced by factors beyond raw skill or talent.
In the world of tennis, the unbounded nature of success can be uncovered by examining the economic rewards achieved by players. For instance, two tennis players with comparable rankings and performance levels might experience vastly different levels of economic rewards. One player may secure lucrative sponsorship deals, attract media attention, and have a strong fan base, resulting in substantial financial gains. This player’s success may be amplified by their marketability, charisma, or personal story, which resonates with fans and sponsors.
Barabási further shows that, even for tennis, a linear improvement in skill doesn’t necessarily yield a proportional increase in rewards. This implies that a player who may be merely 20% better than their counterpart can attain rewards that far surpass what the next best player obtains.
Moving away from tennis to areas where performance can’t be measured, success and social phenomena start to interac in even more powerful ways. These cases often exhibit self-reinforcing feedback loops or ‘preferential attachment’ to use the technical term (as seen with the Basquait example). Success enhances perceived performance, and perceived performance attracts more social success, further perpetuating the cycle. Hence why those people paying for followers may not be as sad and crazy as we think.
Extremistan and Mediocristan Implications for Career Choices
One key takeaway from the work of both Barabási and Nassim Nicholas Taleb is the need to remain cognizant of the landscape you are competing in. The world of Extremistan, where success is skewed and influenced by factors beyond performance, demands a particular kind of awareness. Thus, it is worthwhile to cultivate realistic expectations in these domains, as they present unique challenges that call for a nuanced understanding of what it truly means to succeed.
For example, in most service professions where local prominence is enough, such as plumbing, the competitive landscape is considerably more forgiving. Exceptional talent and luck are not the sole determining factors of success in such fields, allowing individuals to thrive on the merits of their work without facing the daunting pressures of global competition.
However, when one aspires to become a tennis star or an internationally acclaimed artist, the game changes. It becomes crucial to recognize the considerable role that exceptional talent and luck play in reaching the pinnacle of success in these areas – often, both are indispensable.
By understanding the nature of the field we play upon, we can establish appropriate goals and adopt the right mindset to traverse the path to success. Moreover, acknowledging the influence of luck and external factors can bolster resilience when confronted with challenges, and foster a sense of both gratitude and humility for any success achieved.
Fairness in a Social World
For me, the scarcity of true performance-driven success, and the distorting nature of social influence felt like a call to reconsider our conventional notions of fairness. Neoclassical economic notions of competition often lead us to naively assume that the world is fair and that the distribution of reward has at least a rough correlation with performance. But Barabási’s research seems to prove that in most cases this couldn’t be further from the truth. The policy implciations of this are, of course, broad and important but beyond the scope of this blog post.
I Recommend
The Formula is engaging and eminently readable. It delves into many other issues and investigations, some mentioned only briefly here or not at all. I add my recomendation to the pile.
