Why You Shouldn't Imitate Bill Gates If You Want To Be Rich (bbc.com)

dryriver writes: BBC Capital has an article that debunks the idea of "simply doing what highly successful people have done to get rich," because many of those "outliers" got rich under special circumstances that are not possible to replicate. An excerpt: "Even if you could imitate everything Gates did, you would not be able to replicate his initial good fortune. For example, Gates's upper-class background and private education enabled him to gain extra programming experience when less than 0.01% of his generation then had access to computers. His mother's social connection with IBM's chairman enabled him to gain a contract from the then-leading PC company that was crucial for establishing his software empire. This is important because most customers who used IBM computers were forced to learn how to use Microsoft's software that came along with it. This created an inertia in Microsoft's favor. The next software these customers chose was more likely to be Microsoft's, not because their software was necessarily the best, but because most people were too busy to learn how to use anything else. Microsoft's success and marketshare may differ from the rest by several orders of magnitude but the difference was really enabled by Gate's early fortune, reinforced by a strong success-breeds-success dynamic."

Comments

Very simply expressed in xkcd..

[Junta]

https://xkcd.com/1827/

Re:Very simply expressed in xkcd..

[93 Escort Wagon]

Gates DID get a lucky break - there's no question about it. However that "break" was to be born into a well-off and well-connected family.

And, honestly... if you can pull that off, it's almost certainly the best way to "become" rich yourself.

Re:Very simply expressed in xkcd..

[Archtech]

Gates DID get a lucky break - there's no question about it. However that "break" was to be born into a well-off and well-connected family.

That's not the half of it. He also had the "good fortune" to pick a mother who could persuade the chairman of IBM to cut her son a ridiculously favourable deal.

Re:Very simply expressed in xkcd..

[cheesybagel]

Microsoft didn't have an operating system. They had to get it from someone else. IBM basically went to talk with Microsoft because Gates' mother, who used to be a bank manager, did benefit work on weekends with people connected with IBM's management. And Bill Gates' father, one of top lawyers in the area, helped craft their (highly favorable) contract with IBM.

being completely with out

[Revek]

scruples didn't hurt. He had little problem with raiding others ideas and pushing them out of the market. Many of the things he did to get on top of the pile would be actionable today.

Re:being completely with out

[nagora]

scruples didn't hurt. He had little problem with raiding others ideas and pushing them out of the market. Many of the things he did to get on top of the pile would be actionable today.

Google suggests otherwise - industrial-scale copyright infringement? Just ignore it and no one will do anything about it. Global tax evasion? Get the law changed and move on - tax is so "statist", this is the (new) age of the unaccountable corporation. They're not doing exactly the same things Gates did, but they are doing their things in the same style, and that's what actually works.

Re:being completely with out

[Opportunist]

Aka "it's better to ask for forgiveness than for permission".

Re:being completely with out

[DontBeAMoran]

He knew what the big thing was, that's why he said the Internet was a fad. It also explains why you had to add third-party patches to Windows 3.11 to get your computer on the Internet.

Re:being completely with out

[dryeo]

One of the stories I heard was his contract with IBM allowed him to set the prices of the other OSes.
Which brings us to the real smart/lucky thing Gates did, signed a very good contract that let MS keep control of DOS and perhaps the above.
This was possible for several reasons, coming from a family of lawyers, and IBM, due to the antitrust actions on them, being eager to look like they weren't a monopoly.

Step 1 to being like BG has nothing to do with

[laupark]

Step 1 to being like BG has nothing to do with his exact circumstances. It has to do with making use of YOUR special circumstances effectively. Capitalizing on each situatiin and conpunding the gains

Re:Step 1 to being like BG has nothing to do with

[Ryanrule]

Most people dont have any special circumstances.

Re:Step 1 to being like BG has nothing to do with

[jonsmirl]

If you want to get rich you need to partake in an activity that has the potential to generate a lot of money. I have often heard people complain that they give everything working in a job and can barely keep their heads above water. Get a clue, working in a job makes the company owner rich, not you. You also need to do something that amplifies your actions. For example it is hard for a doctor to get really rich. That's because they are paid per action they perform and there is no way to scale. If you invent a drug you can get really rich since the drug goes into a factory which amplifies your invention. You also need to understand the difference between capital and income. It is far easier to get rich off from capital transactions that it is off from income.

Gates' success is impossible to replicate. He had a "first movers" advantage that is gone now. He was also greatly helped by "network effects". These are also things you need to understand to get really rich.

Re:Step 1 to being like BG has nothing to do with

[Opportunist]

Again, the best chance most people have for "special circumstances" is to jump into the way of a rich person's car.

Re:Step 1 to being like BG has nothing to do with

[decep]

Special circumstances are not uncommon, but valuable special circumstances are rare.

Being able to fit 3 golf balls in your mouth is special, just not something that you can easily capitalize.

Re:Step 1 to being like BG has nothing to do with

[jonsmirl]

Starting your own company is a huge piece of it since it gives you the capital piece. Do you know about IRS section 1202 stock? With 1202 stock your first $10M of capital gains is tax free. 1202 stock is Small Business Stock. The federal government and many states do not tax gains from this type of stock since it is a major way jobs are created.

But... this company has to have an amplification effect. That is why it is so easy to make a lot of money in software. The marginal cost of 'amplification' (making another copy) is zero. Zero amplifications costs really lowers the amount of capital you need. It is certainly possible to start a software company while working else where to cover your basic expenses.

Re:Step 1 to being like BG has nothing to do with

[hey!]

Actually I'd put it this way: most people don't have special circumstances that are as easily recognizable in advance.

For example, Mum being chummy with the chairman of IBM at a time they're launching a product you're interested in is pretty trivially recognizable as a special circumstance.

Re:Step 1 to being like BG has nothing to do with

[Solandri]

My extended family moved to the U.S. from Korea in the 1970s. Korea was still rebuilding back then and was paranoid about people leaving with their money, so limited emigrant families to taking about $1000 with them. So each of my father's and mother's siblings (8 in total) arrived in the country with about $1000 and the clothes on their back (and sometimes kids in tow). From worst to best off:

• One unfortunately married an alcoholic, and lives in a trailer park with a poverty level income.
• One made a middle class life built on running a dry cleaner 10 hours/day 6 days/week.
• One made an upper-middle class life built on working overseas construction projects in crappy or dangerous locales. He gets home a couple months out of the year, but is otherwise "at work" 24 hr/day the rest of the year, and mails his paychecks home to his family..
• One made an upper-middle class life built on a dual income (nurse and owning/running a printing shop).
• One made an upper-middle class life built on buying a liquor store and working there 14 hours/day 7 days/week, and investing their income wisely in real estate instead of frittering it away on things like fancy cars and big screen TVs.
• One made an upper-middle class life built on a dual income (engineer and pharmacist).
• My dad was a doctor before moving here, so I'd leave him out of the statistics (lower-upper class). Although I do recall living in assisted housing and having to get clothes and other goods from the Salvation Army because we were poor while he was doing his recertification internship.
• One married a wealthy husband.
• One is upper class - they risked everything they had to start a cell phone store back when cell phones were first becoming popular, and now own a chain and warehouses worth several $million. No fancy education or pre-existing wealth. Just a lot of hard work, and an extensive list of contacts they've built up over the years with cell phone accessory manufacturers and suppliers in China.

If you've convinced yourself or somebody else has convinced you that you have no chance to make "special circumstances" for yourself, then you've already lost. Enjoy the lower or lower-middle class lifestyle that you've consigned yourself to. Yes luck plays a role. But if you don't at least try, you'll never get anywhere.

Re:Step 1 to being like BG has nothing to do with

[WrongMonkey]

None of the situations that you describe sound like "upper-middle class".

One of the characteristics of being middle-class is having leisure time. No matter how much money you're making, working 14hours/day, 7 days/week is not middle class, upper or lower.

Survivorship Bias

[ptaff]

The Misconception: You should focus on the successful if you wish to become successful.

The Truth: When failure becomes invisible, the difference between failure and success may also become invisible.

Survivorship Bias; You Are Not So Smart

Let me see here

[burtosis]

So I shouldn't have a extremely wealthy family, who is well connected, and further take vast sums of money to start a business - and if it fails just take even more money to try again? I'm pretty sure that is possibly the single most consistent detail of the success stories of the super wealthy.

Re:Let me see here

[burtosis]

Going off our president and many others I'm starting to think being smart is a hinderance. Having an ounce of decency or a single moral fiber almost assuredly is.

Re:Let me see here

[LaminatorX]

| What was it that Steve Jobs did that you did not?

Grew up in Silicon Valley at exactly the right time.

Marketed Steve Wozniak's brilliance, repeatedly.

Figured out that how people interact with a machine is as important as the capabilities of the machine itself.

Why you shouldn't imitate yourself

[Anonymous Coward]

I was very active in startups between 1995 and 2000. Many entrepreneurs made a lot of money, and many lost the money again, because after the trick that earned them the cash, they thought they were pretty smart and wanted to replicate the success by investing in newer startups. Then they found out the hard way it wasn't how smart or special they are that made them successful at first, but that they were at the right place at the right time.

Re:Education and hard work

[Opportunist]

The most successful ones, though, combined psychopathy with the hard work of others.

Jokes aside, it's not hard

[RevDisk]

To get rich you need three things.

Hard work - Don't discount this. Yes, connections and money make things easier, but it still takes work. A lot of it.
Intelligence - Hardest work on the planet won't always get you further.
Sheer flat out luck - Being the hardest working smart person doesn't help if you get a crippling illness or just at the wrong time. Being born wealthy or with connections is genetic lottery.

You pretty much need a lot of all three to get super wealthy. Two will get you into a decent place and you'll do fine.

If you just work hard enough you can do it too

[bravecanadian]

You'll be super rich and successful too, honest. Just listen to all the successful people who believe this...

Sure, hard work is part of it, but as this article points out it is only part of it. Coming from the correct womb and happening to be in the right place at the right time seems to have a lot more to do with it.

There are plenty of people who work their asses off and get no where.

Just close enough to the truth to be misleading.

[feenberg]

It is true that there are a lot of people that claim that since monopolists are successful and charge high prices for poor products, you can become successful by charging high prices for a poor product. That generally doesn't work for non-monopolists. On the other hand, the emphasis on Bill G's parents does ignore the fact that IBM offered the same opportunity to Digital Research, which turned them down. And IBM offered a word processor of its own - can't have more advantages than that - and it failed in the marketplace. It also offered an OS - what happened to that? Maybe it was higher quality than Windows, but it was 10 times as expensive and the only print driver it came with was for a single dot-matrix printer.