Seneca said Luck is what happens when preparation meets opportunity, and it’s certainly an ingredient in startup success. Luck refers to your ability to succeed through chance or good fortune, but do you create the opportunity by being in the right place, and timing brings it to life, and can you make your own? The answer to both questions for me is yes.
To get everything in the right place, the decisions founders make involve luck, judgement over uncertainty and risk, and occasional bluff – you can’t control the bet, but you can control how you play the game of chance. A bet can be tactical or strategic. Product decisions are bets. Sales negotiations are bets. Hiring is a bet. In these moments, we’re betting against all the unlucky alternative outcomes that we are not choosing.
Depend on the rabbit’s foot if you will but remember it didn’t do the rabbit any good. To many, luck feels intangible, transient, and immaterial, yet the results of luck are clearly visible. It’s easy to boil down success to luck alone, but for me it’s about when skill and opportunity come together: luck is an accident that happens to the ambitious and the competent.
When I’m at the pearly gates, when Mephistopheles is reaching up to grab me, through persistence and discomfort I’ll still be an optimist, and that’s key to creating your own luck. Lucky people are optimistic and have positive expectations, leading to self-fulfilling prophecies. Taking a positive outlook, they can spot the good in situations and make the most of difficult circumstances – which increases your chances of creating your own luck.
You have to maximise the serendipity by putting yourself in situations where random positive encounters are possible, and you are able to spot chances hiding in plain sight. Explore improbable options rather than screening them out as unrealistic from the start, as luck isn’t always random; it can be spotted if you allow yourself to look for it. You create your own luck by noticing and acting on opportunities, persevering in times of uncertainty and doubt before a breakthrough happens.
Dr. James Austin, neurologist, and philosopher, in his book, Chase, Chance, & Creativity: The Lucky Art of Novelty, proposes the notion of four types of luck. Not getting hung up on the labels per se, but there is some resonance for startups here:
1. Blind luck is out of your control, it’s a matter of being at the right place at the right time, a lucky coincidence? For a startup, it dictates your early events and experiences as you power up. You can’t predict nor repeat the outcome of blind luck, it’s simply out of your hands like the outcome of a dice roll. To leverage blind luck, take advantage of those opportunities and milk them for all they’re worth.
2. Luck from motion When you’re running around creating lots of opportunities…things will get stirred up in the dust – Naval Ravikant. This luck comes from persistence, in other words, the more opportunities, experiences, connections, and skills you pursue and acquire, the luckier you’ll be. If you take enough shots at the goal, you’re bound to hit it. This form of luck rewards risk-takers. Keep kicking up dust and take chances. Don’t be afraid of failure.
3. Luck from awareness Chance favours the prepared mind – Louis Pasteur. Luck from awareness is an opportunity that only you, as a result of your preparation, knowledge, skills, and experiences, are able to see. Bill Gates and Steve Jobs would be great examples of this. Luck from awareness is the aha moment that you get because you were able to put things together, and quickly recognise the opportunity in front of you.
4. Luck from uniqueness This type of luck relies on who you are. In other words, your traits, bring you luck. This type of luck unfolds elliptically and often works indirectly. Each opportunity, and its success or failure, bolsters your reputation, bringing more (or less) your way. Be the only one so there’s no one else to go to. Increase your odds
The reality is a startup has more to do with luck than you may think. There’s a random nature to success – only 20% of startups get to a five year anniversary – but learning how to bet is important when it comes to your venture, as there are things you can do to improve your odds. To quote Nassim Taleb in Black Swan: The strategy for discoverers and entrepreneurs is to rely less on top-down planning and to focus on maximum tinkering and recognising opportunities when they present themselves.
By calling it a bet, we are admitting that something will happen, and of course, losing is an option. Timeframes matter too, when will we know if the bet has paid off? Placing small bets with a short timeframe enables us to learn information that can clarify the odds for larger bets, and de-risk. You get lucky!
You can make concurrent bets too, but taking too many bets at once can distract. Equally, you can’t win much if you spend all your time at the penny slots – you can’t win big unless you pull up a chair at the high stakes blackjack table. Each time you release an update to your product you’re playing a hand at the startup blackjack table. The combination of funding, timing, luck, and your burn rate determines the number of hands you get to play.
So, how should we make startup bets and ride the lucky wave?
A moon shaped pool: expected the unexpected. Making better decisions starts with understanding that uncertainty can work a lot of mischief. We are generally discouraged from saying I don’t know or I’m not sure, we regard those expressions as vague, unhelpful, and even evasive. But getting comfortable with I’m not sure is a vital step to better decision making and expecting a moon shaped pool as something unusual, but possible.
Getting comfortable with I’m not sure being simply a more accurate representation of uncertainty, luck, and reality. When we accept that we can’t be sure, we are less likely to fall into the trap of black-and-white thinking. Making better decisions stops being about wrong or right but about calibrating the shades of grey.
Fake plastic trees: be open your mind to all possible options. The startup world is a pretty random place. If we don’t change our mindset, we’re going to have to deal with being wrong a lot. We become focused on the immediate situation such that we overlook the range of possibilities. This can lead us to make rash decisions or miss opportunities because we don’t recognise them.
There is always a context beyond than we initially thought – fake plastic trees in garden centres intrigue me – more possibilities than we envisioned. With a broader mindset we can counter the discomfort with greater optimism. Recognise we have options based on upsides too.
Yesterday, I woke up sucking on a lemon. Think in terms of probabilities, not binary outcomes. Human nature means we spiral into imagining extreme outcomes. But luck says we should stop thinking in binary terms – stranded or not stranded – we create anxiety and not options. When we consider the full range of possible outcomes, we see things differently. French philosopher Michel de Montaigne’s poignant observation comes to mind: My life has been full of terrible misfortunes, most of which never happened.
Karma Police throw the thinking forward. Suzy Welch developed a popular tool known as 10–10–10 that has the effect of bringing the future into our in-the-moment decisions: What are the consequences of each of my options in 10 days ? In 10 weeks ? In 10 months? Proceeding this way reduces the weight of the emotion of the moment and brings karma and more rationality to the decision-making process, considering the outcomes and giving you the opportunity to consider future ‘lucky’ outcomes as possible options.
The bends: work backwards from a positive future. When we identify a desired outcome, work backward from there to identify the steps that must occur to reach the goal. That leads to developing strategies to increase the chance this event occurs. ‘Backcasting’ is a useful mental ‘work around the bends’ exercise for identifying what we need to make happen. It may involve some good fortune and luck, but it is a more positive approach.
No surprises, pre-mortems give us a balance. One approach to achieve success is through positive visualisation outlined above, but the corollary of incorporating negative visualisation is also a useful technique. While backcasting imagines a positive future, a pre-mortem imagines a negative one. It may not feel so good during the process to include this focus on the negative bets, but the balance gives us a contrast to turning a blind eye to negative scenarios and helps us develop a ‘no surprises’ set of scenarios you could face if the luck doesn’t come your way.
2+2=5: Less time means less room for making excuses The problem when we have time to plan is that it potential dilutes the thinking by enabling us to imagine too many options, and also lends itself to procrastination. Both can lead us to making avoidable mistakes. Short windows force us to make the most efficient bets, because there’s no room to over think things.
Just because we operate in short timelines doesn’t mean we don’t have long term thinking. OK computer, now what can we do today? Short windows force us to set priorities, we’re forced to have a hard discussion about what really matters in the moment, which is an important and cathartic conversation to constantly have.
Weird fishes Exist in the deepest oceans, but it’s much better to put your energy into shaping the upside of a new reality, the new game, the new space with good luck, and stop imaging the grotesque and ugliest outcomes where bad luck dominates your thoughts. Stop thinking about worse case scenarios. We’re not scaremongering, this is really happening, happening – with some risk – and believe that you will get some luck along the way.
Just: We got there, just. Luck plays a part, like it or not. No one has done more thinking regarding the impact of luck on making decisions than Michael Mauboussin. He states that it is reasonable to expect that a different outcome could have occurred. Mauboussin points out There’s a quick and easy way to test whether an activity involves skill: ask whether you can lose on purpose. In games of skill, it’s clear that you can lose intentionally, but when playing roulette or the lottery you can’t lose on purpose.
Summary In the startup environment some things are unknown or unknowable. Don’t blame it on a black star, the influence of luck makes it impossible to predict exactly how things will turn out, and all the hidden information makes it even worse. Founders need to keep a forward-looking mindset, you’ll have hunches, insights, and some foresight.
No alarms and no surprises just isn’t going to happen, so accept it. You make your own luck they say, good fortune brings in some boats that are not steered, but in my book, good luck is another name for tenacity of purpose. If you view all the things that happen to you, both good and bad, as opportunities, then you operate out of a higher-level thoughtfulness, and that’s where you make your own luck.
