Never ride the coattails of a successful business. When you do, you are almost always setting yourself up for failure.

Here’s the problem. Success in any domain is extraordinarily context specific. MySpace was successful for a time because when it launched, the world needed a MySpace. The same things that made MySpace a star at launch, crippled it a few years later when Facebook took its place.

Most ideas follow this same model, worse than that, by the time writers, academics and journalists get around to publishing their tell-alls about how “Google did it” the context, the landscape, the entire edifice in which a business might be built to that mold will have changed so much that the information is all but useless.

If it’s not completely useless, it’s so generic that it wasn’t worth reading about in the first place.

While getting a historic perspective on how successful businesses have been built over time is both fascinating and rewarding, if you try to build a financial empire in the same mold that J.P. Morgan used in 1895 you are going to be sorely, sorely disappointed with your result.

Instead, whenever you read about how another company beat the odds take some time to ask yourself whether they would be able to do it again in the landscape that you currently find yourself in. If not, why? The answer to that question can be truly illuminating.

While you’re at it, take a look at some of the psychological basis of why we find it so interesting to follow in the footsteps of giants.

…The most basic problem that I identify is an example of what is known as the Halo Effect. When a company is doing well—when its revenues and profits are up, and its share price is strong—it’s natural to infer that the company has a good strategy, an effective leader, excellent customer focus, and a vibrant corporate culture. When that same company falters, it’s easy to say that the strategy was misguided, the leader became ineffective, the culture became complacent, and the customer was neglected.

In fact, very often the company did not change much at all. Rather, people made different attributions based on its changing performance. Unfortunately, so much that we read about companies—in the business press, case studies, and even large sample research studies—is based on data that are undermined by the Halo Effect. These studies appear to have described the factors that lead to high performance, but are more correctly understood as identifying the ways that high performing companies tend to be described.

Read Why Success Formulas Will Never Work (Via Farnam Street Blog) (Images)

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