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Feeling Lucky?
By Joseph Hunkins at April 26, 2008 5 CommentsOver at CNET Steve Tobak is wondering how much of a role luck plays in business success. Tobak nots some big lucky breaks in business such as Bill Gates’ landing the IBM OS contract that launched Microsoft after being second choice for the job, but he winds up concluding:
… in my experience, passion, intelligence, hard work, perseverance and timing play a bigger role in success than luck.
I’m in partial agreement but I don’t think I’m as convinced as Steve that things we can control play a big role in business success. If they did simply cutting loose a bunch of hard working, smart folks on new projects would generally bring success, and this is rarely the case. In fact if we look at most of the most conspicuous tech success stories of the century they seem to be more a product of a small number of people finding new solutions to major problems, often stumbling into success.
Yahoo, Google, Microsoft, and Apple all started small - very, very small in fact - and I think all of them would have happily sold out for tiny fractions of their current values very early in their growth curves before the founders understood the significance and magnitude of their key technological innovations. Yet they did not sell out because in I think all these cases there were not serious buyers who were willing to pay much in the early stages. Neither the founders of these tech behemoths, nor the key players who could have bought them out realized the potential impacts of these companies. All these four, and hundreds of other smaller companies, have gone on to become global leaders and global brands.
I’m not suggesting they were just lucky, but I think serendipity may play a large role in success, and it is probably helpful to recognize that success may come as much from circumstances that you cannot control as from things you can.
5 Comments
Paul Graham has a great article on this too call “Why There Are’t More Googles” http://www.paulgraham.com/googles.html
Unexpected events and self selection are the arguments Nicholas Taleb makes in “Fooled by Randomness”. In my experience, CEOs tend to success as the result of their work, but failure as some outside event that they couldn’t control. In reality, success and failure are probably more random than people believe.
I think the best way to think of this is that you capilise on good random events, you have to be doing something. Thus working hard, meeting and talking to people increases the chances of getting exposed to those events, so that you can make use of them.
This seems to be the more reasonable way of reconciling the two views.
… working hard, meeting and talking to people increases the chances of getting exposed to those events
Yes though I wonder how important these really are to biz success? Gates and Allen, Yang and Filo, Page and Brin were all pretty reserved guys early on in their business models, and arguably they were not working all *that* hard (though I’m confident they were all thinking very hard and cleverly), rather their ideas were out of mainstream and very timely. Not “luck”, but also something different from good old American hard work.
Joseph - good point. But there are sow few of these people that I wonder if they are not just outliers in the randomness of events. Clearly if business success was all random, then why even bother to do anything?
Think of it like gambling. You have to be at the game to win. Winning requires minimizing losses and riding the runs of wins. You can play games of skill like Poker, learn a trick like card counting in BlackJack, or just run with the randomness of Craps or Slots.
If you don’t gamble, you neither win nor lose. If business is highly random, then like gamblers, you will need to be in business playing the game and maybe you win with some skill or juist by plain luck.
success being random is different from being lucky.
in India, we call it Karma. there are things beyond our control that determine success and failure.