What does Gandalf believe is necessary for the dwarves mission to succeed in The Hobbit?

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Gandalf believes that the company of dwarves must have a fourteenth member, a burglar to be exact, in order to succeed.  His choice for the job is a hobbit, Bilbo Baggins.  Gandalf gives several valid reasons for choosing a hobbit.  His foremost reason has to do with the problematic existence of the dragon Smaug whom Gandalf insists cannot be met head on, "not without a mighty Warrior, even a Hero" (21).  According to Gandalf, heroes and warriors were in shockingly scarce supply and "that is why [he] settled on burglary--especially when [he] remembered the existence of a Side-door" (21).  Bilbo's small stature makes him the perfect size for sneaking through the hidden door, and moreover, Smaug will not immediately recognize the scent of hobbit as he would the smell of dwarves, of which he would be very familiar.  As Burglar for the company, Bilbo serves multiple purposes--he increases the company to numbering fourteen, thus avoiding the unlucky number thirteen, and will prove most useful in securing information about Smaug's whereabouts and condition of Erebor.

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