It doesn't work in the way people hope, since they do not succeed in accomplishing what they planned to accomplish. But it does succeed in the sense that people's lives get better over time. This happens even when they are bad at it. It is kind of like natural selection; if something is making your life much worse, you stop doing it, and sooner or later you will happen on something which makes your life better.
LW has a problem. Openly or covertly, many posts here promote the idea that a rational person ought to be able to self-improve on their own. Some of it comes from Eliezer's refusal to attend college (and Luke dropping out of his bachelors, etc). Some of it comes from our concept of rationality, that all agents can be approximated as perfect utility maximizers with a bunch of nonessential bugs. Some of it is due to our psychological makeup and introversion. Some of it comes from trying to tackle hard problems that aren't well understood anywhere else. And some of it is just the plain old meme of heroism and forging your own way.