Are successful entrepreneurs just lucky? Two sides of the argument
What role does luck play in launching a successful startup (or several)? Sydney Angels members David Jackson and Greg Bryan offer their thoughts.
Success is just a matter of luck (just ask any failure!)
It’s a view that may not resonate with many successful entrepreneurs, and can even cause serious anger. No surprises there. After all, successful founders put in the hard yards.
But then again, so did many of those who fell off the tracks somewhere along the idea-startup-scaleup-exit journey.
No-one wants to think they just fell into their success. But it would be hard to credit ourselves 100% for 100% of our achievements too. Wouldn’t it?
So what extent does luck actually play in launching a successful startup (or several)?
We offer two sides to the argument.
David Jackson: It’s a matter of luck and risk-taking
I’ve heard it said that only 17% of business owners attribute their success to luck.
But I call bullshit on this number. And don’t just take my word for it.
In his commencement address at Harvard — from which he incidentally dropped out and went on to make some $47 billion — Mark Zuckerberg blatantly stated: “We all know we don’t succeed just by having a good idea or working hard. We succeed by being lucky too. .. If we’re honest, we all know how much luck we’ve had.”
Warren Buffet, investor extraordinaire worth a not-too-shabby $80 billion has also been quoted on the topic. In his words: “My wealth has come from a combination of living in America, some lucky genes, and compound interest. [Both] my children and I won what I call ‘the ovarian lottery’.”
And if you still need more proof, Google billionaire Eric Schmidt also said: “I would say I’m defined by luck, and I think almost anyone who’s successful has to start by saying they were lucky. Lucky of birth, lucky of having intellectual and intelligent family home life, upbringing, global upbringing.”
The list could go on. And then you also have to remember there are so many different types of luck.
‘Circumstantial luck’ is a ‘right place at the right time’ scenario. You may be having lunch with an acquaintance and her friend joins you and becomes your largest client. Or you might be lucky enough to be born at the right time into the right circumstances and have the right upbringing to predispose you to a higher likelihood of success: ‘constitutional luck’.
And then there is also my absolute favourite type: ‘dumb luck’. This is where ill-informed decisions paradoxically result in profitable outcomes with the classic example being winning a lottery you have a one-in-ten-billion chance of winning. Your pockets aren’t exactly lined because of your smart decision-making if you know what I mean!
The way I look at it, it would actually be hard not to profit in life from one or multiple instances of these different types of luck. So why would business success be any different?
A chance encounter with a VC in a lift, a great night’s sleep before your big pitch, a propensity to take a punt on the unknown, your competition accidentally missing a tender deadline and allowing you to Steven Bradbury your way to a win.
I’m not saying it’s not worth putting in the hard yards, and that you should go buy a lottery ticket instead. Dumb luck can’t be created on purpose in case you were wondering!
But I am saying that those who have ‘made it’ should understand they may have had a helping hand from higher powers along the way. And we should all perhaps be a little kinder to those who haven’t made it — yet.
Greg Bryan: Luck is just the beginning
‘Impostor syndrome’ is the persistent (and false) belief that any success we achieve is purely down to luck.
And I don’t know about anyone else, but I haven’t met a single entrepreneur who hasn’t suffered at least the tiniest bit of this at some point in their journey!
So, I don’t think the issue here is that entrepreneurs aren’t accepting of the fact that luck may have been a factor in their success.
I actually believe successful entrepreneurs give too much credit to the luck factor.
Maybe they had some lucky moments. But what about their years of hard work strategy setting, sacrificing, planning, pivoting, stressing, selling, pitching, negotiating, worrying, learning, networking, working on the business, working in the business, and — above all else — persisting, persisting, and more persisting?
The time spent away from longsuffering families, the sleepless nights? The anxiety, the fear, the depression, the loneliness, the pressure of betting it all for a hugely uncertain payout that may or may not occur in a hugely uncertain timeframe?
If it was just luck, then surely they wouldn’t have to do any of these unpleasant things to succeed?
The way I see it, luck is kind of like privilege. It may hand you opportunities and perhaps a head start at various points. But it doesn’t mean you can simply rest on your laurels and then magically receive a whole bunch of rewards after this.
Take the case of our friend Zuckerberg.
Was he ‘lucky’ when he stumbled upon the idea of social sharing? Maybe. Maybe it was a right-place-at-the-right-time situation. Maybe he even copied Myspace a little, who knows.
But it was his creativity and quick thinking that saw him develop a differentiated platform with such rapid appeal and broad take-up, and which had users signing up in droves.
It was his business acumen and determination that drove his commitment to an excellent user experience and a continuous process of innovation and commercialisation. It was his personal characteristics — not solely the original right-place-at-the-right-time situation — that saw him fly past Myspace and leave Tom Anderson reeling in his wake.
Is Zuckerberg ‘lucky’ every time he adds a new feature that further develops the platform? No. Is he lucky every time he responds to the most recent accusation of election rigging, data privacy breaches, or the spreading of fake news?
This is not about luck. It’s about taking personal responsibility and thinking quickly and divergently. He has constantly evolved his approach and operations, scanned the horizon for future threats and innovated accordingly, factored social sentiment into the product, and made huge amounts of money for many people in the process.
Not lucky. Enterprising.
The conclusion?
We can probably all agree that luck exists — it would be highly arrogant to believe we achieved every one of our successes without any help whatsoever! But luck certainly doesn’t build — or, in particular, sustain — a successful business on its own.
The success of any business ultimately depends on the continuous ability to create value for users or customers in a commercially viable manner. There is no single form of luck that can bring that type of result over the long run.
So the more founders who can develop their entrepreneurial skillset — and engage in continuous learning, innovative thinking, and constant hard work — the readier they will be to embrace all of the different forms of luck that might be coming their way.
And the sooner you can build your own Facebook or Google.
