The Case for Scott Adams’s Irrational Optimism

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Vikram Bath

Vikram Bath is the pseudonym of a former business school professor living in the United States with his wife, daughter, and dog. (Dog pictured.) His current interests include amateur philosophy of science, business, and economics. Tweet at him at @vikrambath1.

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27 Responses

  1. Avatar Jaybird says:

    The big insight that Scott Adams gave me was this:

    If you want to make a *LOT* of money, you have to be the best in the world at something (or in the top 40 or 50). See: Basketball players, Entertainers, etc. This isn’t exactly within my reach. But that’s okay! He pointed out that if you want to make good money, you only have to be pretty good at three or four things. I said… hey! I can do that! There are tons of people who are good at this or that application and tons of people who are good with this or that operating system and tons of people who are good with security but fewer who are good at two of those and those who are good at all three are downright scarce.

    So be good at three things!Report

    • Avatar Vikram Bath in reply to Jaybird says:

      Yep, there was that too. It’s actually a fairly wide-ranging book. I think I had already very much incorporated that into my career, so it didn’t fit into my list of possible explanations for his success over mine. That’s why this post is only “kind of” a review. 🙂Report

    • Avatar Kim in reply to Jaybird says:

      It’s actually fairly easy to be the best in the world at something.
      Most academics manage it.
      Most academics are relatively poor.Report

    • Avatar Will Truman in reply to NewDealer says:

      There is a disconnect between the sort of optimism Adams is talking about and the sort of positive thinking being criticized in the New Yorker article.Report

      • Avatar zic in reply to Will Truman says:

        Thanks for that link, @will-truman

        I do question if it’s a direct effect of positive vs. negative thinking or something more subtle, however; something that the positive/negative thinking might be an indicator of, but not necessarily the best measure of: ability for self-analysis, ability to examine constructive criticism, and ability to incorporate the results of that analysis and criticism into how you approach/carry out what you’re doing.

        I’m going to speak in terms of artists here, because I know a lot of artists, and I’ve known artists long enough to get some sense of how those who become successful achieve that.

        First, those who are generally really successful tend to have habits and routines, as Adams suggest. (I recommend reading Twyla Tharp’s autobiography to learn more on this.)

        But more importantly, instead of viewing themselves as great or successful or whatever, they’re constantly examining how they can be better at what they do. They tend to welcome criticism because it’s often a clue to an area where, with some effort, they can improve.

        A lot of the people who have very positive self-image, inversely, are happy with where they are right now or where they imagine they’ll be at some point in the future given their current skill set. They’re complete; the effort to improve has led here. And they don’t welcome criticism; it’s perceived as an attack on where they are now, and not as an opportunity to help them work toward the goal of where they want to keep going.

        That last is about goals; the goal of being a success at something, with success being the goal, vs. the goal of being the best you can be, which entails a commitment to life-long effort, which requires seeking out criticism.Report

      • As I think Vikram’s and ND’s links demonstrate, there are multiple kinds of positive thinking (and negative, one would assume). There is the sort of positive thinking that Adams is talking about, where you’re just bouncing from one project to another because you think for all of them “This could work!” And there is the sort of positive thinking criticized in ND’s link because it leads people to do nothing because they’re optimistic in the sense that they’re thinking something good will just happen.

        On the negative side, there are nihilists who never try anything, and there are pessimists who work harder because they consistently see the dragon right behind them.Report

      • Avatar greginak in reply to Will Truman says:

        It seems more about locus of control; I can make things better is a powerful feeling vs. i can’t change things which is inherently powerless. However someone can feel they have little power to change things but still feel they are in a good spot so they don’t care. Or they may feel they have no control but Gosh will care for them or they are just leaf in the wind that will make the best of where ever they land.

        FWIW locus of control, internal or external, has a long history in pysch research showing it is one of the strongest factors in happiness vs depression.Report

      • Not all “happy” thoughts are the same. Specifically in this post, I am talking about Scott Adams being delusional about the probability of success of his ventures. This is a very different type of positive thinking than in the New Yorker article, which instead concerns visualizing yourself as already having achieved something. (That’s actually a result that’s been repeated a number of times, but it comes back in the news because I don’t think people will ever believe the result no matter how many studies are performed. They’re too positive for that!)Report

      • @greginak ,
        Yep, locus of control (and self-efficacy) is indeed closely related to what I am referring to.

        As a technically note, it’s not exactly locus of control because what I am talking about is a general increase in the assessed probability of a venture succeeding, not an increase in the belief that one’s actions will determine success, but that’s a pretty fine distinction.Report

      • FWIW locus of control, internal or external, has a long history in pysch research showing it is one of the strongest factors in happiness vs depression.

        That’s interesting. I would guess that the results would be mixed because of internal-locus having a mix of miserable perfectionists and happy achievers and external-locus having a mix of nihilist and people who can shrug off the injustices of the world.Report

      • Will, it is interesting to think whether having control and then failing might make you more unhappy than not having control and then failing because that determines whether you blame yourself or not, but in general Greg is right. People who perceive themselves as in control of their environments are happier and more likely to actually *do something*, which is what I was getting at in this post.

        As a totally irrelevant side note, the related concept of self-efficacy was the predecessor of one of the constructs in my dissertation.
        http://en.wikipedia.org/wiki/Locus_of_control
        http://en.wikipedia.org/wiki/Self-efficacyReport

      • Avatar greginak in reply to Will Truman says:

        People with an a more internal locus of control can shake of the inevitable injustices of the world because they feel they have power to change there situation. They aren’t helpless. Those who feel helpless might be happy go lucky but they are still stuck with whatever they get. Hopefully if you have an internal locus of control you also have the ability to learn from your mistakes. I think there are those people that don’t ever seem to learn much but keep energetically and hopefully trying new things. That’s still better then feeling helpless though.Report

    • Avatar zic in reply to NewDealer says:

      And, wrong threading, I meant to reply to @newdealer (with the thanks for the link) and instead replied to @will-truman.

      Please forgive. I will try to improve.Report

    • Avatar j r in reply to NewDealer says:

      Seems more like a complement than a counterpoint. The Secret is about visualizing goals, which Adams agrees is sub-optimal.Report

  2. Avatar James K says:

    I think Adams is on to something, but it’s not irrational exuberance.

    A couple of years ago, I read Adapt by Tim Harford. He made the argument that one thing markets do way better than governments is that they make it possible for people to try lots of new ideas, while culling the ones that don’t work. His argument was that governments could be more effective if they learned how to do more experimentation, including rigorous measurement of success and shutting down initiatives that don’t work.

    In the book, Harford notes that Google expects 80% of its new initiatives to fail. I recall from university that venture capitalists operate on a similar model – investing in a lot of small projects, expecting most of them to fail, but that a few of them will make enough money to make up for it.

    I think Harford’s response to Adams would be that the key to success isn’t believing everything you do will work, but rather being prepared to try and fail over and over again until you find an idea that let’s you succeed.Report

    • Avatar Vikram Bath in reply to James K says:

      First, great comment and examples.

      I do have one tiny quibble. It is one thing that Google, the corporation (and presumably top management), expects an 80% failure rate on new initiatives. It is quite another thing if the individuals working for any given project within Google think that there is an 80% chance they will fail. Eric Schmidt can be happy with knowing the true odds, but I wonder whether individual workers can put their souls into a project without believing it’s at least closer to 50-50, even if that’s a lie.

      Similarly, venture capitalists might know the real rate of success is slim, but I dare say that each company they invest in is optimistic about its own likelihood of success. I’m guessing that each one think it’s that 1 in 10 that will make it.Report

      • By the way, that doesn’t mean that I appreciate Hartford’s point that even if the odds are bad you should try anyway. I just think that’s easier said than done and psychologically the only way to take big risks may be to convince yourself that they aren’t actually that risky.Report

      • Avatar zic in reply to Vikram Bath says:

        Back in the day, the success/fail rate for VC investments was typically pegged at 1 in 7. I wouldn’t be surprised to see this has changed, but mostly because venture investment had changed, less start-up money and more follow-on money, combined with the emergence of whole new tech sectors that have produced bubbles; and I’d look for ratios of successful angel investors who do startups for a better comparison.

        Having had many friends and family in the industry, and having done a good deal of writing about the venture industry, one thing jumps out at me: most successful investors look for people who are serial entrepreneurs; that is, they’re most likely to invest money in businesses where the founder has tried (and most likely failed) several times before, and can demonstrate the ability to learn from their past mistakes; the term used up thread was internal locus of control.

        In listening to venture-investors talk, be they investors evaluating deals for a VC fund or angel investors investing their own money, they spend a lot more time talking about what they learned from their investment failures then their successes. And over and over, I’ve heard a failure at due diligence, particularly the due diligence to understand the capacity of the people they’re investing in to learn and grow, as the primary pitfall they face.Report

      • Avatar Mike Schilling in reply to Vikram Bath says:

        Success means different things to different people. To a CEO, it might be “It brings in enough money to significantly affect the bottom line”,to an architect it might be “We built a great prototype and learned a lot of things that’ll go into newer products”, and to an engineer it might be “It got finished and into customers’ hands and some of them really like it.”Report

      • Mike, you left out “my boss didn’t yell at me today.”Report

      • Avatar Mike Schilling in reply to Vikram Bath says:

        I was quite serious. Each of those represents an achievement that it’s quite sensible to feel pride in, just an an academic can feel pride in a paper that’s published even if it doesn’t revolutionize his field and get turned into a feature film starring Matt Damon as him.Report

      • Avatar Jim Heffman in reply to Vikram Bath says:

        “It is quite another thing if the individuals working for any given project within Google think that there is an 80% chance they will fail. ”

        “Failure” in a business sense means something different from “failure” in a technical sense. The individuals working on projects at Google want to achieve technical success. If their work goes on to business success that’s even better, but it’s not how they achieve self-actualization.Report

      • Avatar Kim in reply to Vikram Bath says:

        Vik
        I can put my heart and soul into projects with 10% chances of success. Knowing that even if they don’t succeed, we’ll all benefit later.
        [Yes, you have benefited from my coding@home 4 fun]Report

  3. Isn’t a really good way to hack failure to define success out of existence? Might that not be what Adams is doing in the forth approach? There is far less lost in work on a project that is sure to result in something, which can then be evaluated in multiple and complex ways, than there is to be lost in a project that has a certain percentage chance of success, with the remaining outcomes being “not success.” If you just decide to define all outcomes as neither success nor not-success – take success off the table as an evaluative category – then suddenly all of the fear of putting work into a project that is unlikely to succeed evaporates. All you have to do is decide whether a project’s set of outcome possibilities is interesting or valuable enough to you to explore via undertaking the project. Exploration rather than goal-pursuing.

    Just my 2 centavos.Report

  4. Avatar Jim Heffman says:

    I really don’t think you can discount the success of “Dilbert”, though. Dilbert was a source of great wealth for Scott Adams, and it’s easy to be optimistic and risk-taking and experimental when you know that you can just print a new “Dilbert” collection and get a quick million bucks.Report

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