Luck

An often-underrated ingredient of success

Most of us would agree that when people succeed, it’s due to some combination of good choices, hard work, and good luck. (Although the whole question of success vs. failure can itself be an interesting topic for examination, I’m intentionally avoiding those issues. Instead, I’m assuming, for now, that the judgement of success or failure is simple and unambiguous.)

Correspondingly, we know that when people fail it’s due to some combination of poor choices, laziness and bad luck.

However, when people are telling stories about their success or failure, these factors are not presented consistently. Success stories tend to emphasize good choices and hard work while downplaying good luck. Correspondingly, failure stories tend to emphasize bad luck while downplaying poor choices or laziness. (This issue is related to, but not identical to, selection bias – about which I’ve written previously.)

In recent years, I’ve pointed out this structural aspect of success stories each time I’ve told students about my career, as one of several reasons why they should be skeptical of my stories or anyone else’s stories: without necessarily meaning to mislead, I (and other people) would tend to downplay elements of good luck and would tend to highlight elements of bad luck.

Being lucky

I was recently a little surprised when one of my friends told me that he was sure that things would work out for me, because I “have always been lucky.” I was startled because I don’t think of myself as being a particularly lucky person, at least in the sense of “always winning,” or “usually winning.” But, of course, that could be a case if downplaying my good luck in the stories I tell myself.

I couldn’t really say he was wrong, because I do think of myself as lucky in the sense of “having a surprisingly good life” and “appreciating what I have.” I am keenly aware that much of what I have is an accident of birth, and therefore essentially good luck: I am a white cis male in the US in the first half of the 21st century, raised in an upper-middle-class family, which means (as my wife and children sometimes put it) I am “playing the game on the easiest setting.” However, my friend also shares these characteristics, so it’s unlikely that’s what he meant when he referred to me as lucky.

Certainly, I do not find myself interested in swapping places with anyone else: even when there have been people who I thought were enviable in some way, I have either readily perceived or later discovered that there were aspects of their life that I would not want to take on: family problems, illness, or just being a huge jerk. Steve Jobs and Elon Musk come to mind as examples of people who initially struck me as impressive, but on closer examination seemed kind of awful.

Napoleon supposedly asked of a new potential general, “is he lucky?” So there seems to be a long tradition of people being concerned with the difference between luck and skill. Apparently, his question was motivated by the idea that being lucky was more important than being skillful, at least for warfare.

From my friend’s perspective, I do look like a lucky person: I have been married for a long time to a wonderful woman who is my best friend and a person I continue to find fascinating; we have three interesting, talented, lovable children who have grown into fine adults; I have published a book and have a stack of patents; I am gainfully employed; I have made enough money to live comfortably. Although I know people who are wealthier than I am, and I know people who seem to enjoy their work more than I do, I would be hard pressed to find someone whose overall balance between family, personal interests, and money has worked out as well as mine.

Being unlucky

At the same time, I tend not to think of myself as “lucky,” because I’ve had to navigate some difficulties in life. Now, of course, everyone has difficulties, and my difficulties can seem trivial when compared to other people’s. Nevertheless, I can list some misfortunes from my life: my younger brother died suddenly; my parents divorced; my mother had an affair with the husband of my teacher; I was bullied in English school for being an American, bullied in American school for being English. None of these would necessarily register as Really Serious Misfortunes in the global scale of terrible things that happen to people, and yet it’s equally clear that none of them would be categorized as good luck. One possible conclusion is that I may well be, in a global sense, a lucky person, but that such a status does not immunize me from having my share of ill fortune.

Our conception of fate is very different from what it once was. In earlier eras, every good or bad thing would be attributed to divine influences of one sort or another, and the unfolding of a divine plan. Our only available response would be to try to placate those divinities. We moderns instead tend to emphasize the ways in which people control their fate and make their own choices, choosing their own path – which is probably, on balance, a good thing. However, it does have the unfortunate effect of sometimes making us unsympathetic to people who have challenges not of their own making, people who are genuinely having one of those occasional accidents of fate or runs of bad luck. (I’ve written previously about the ways in which each of us is effectively an experiment by the universe, and accordingly randomly endowed with useful or useless characteristics for our specific environment.)

Luck in business

It’s sensible, but tricky, to consider the role of luck in my multiple successes at startup companies. Although it’s not very likely that I would have had five successful companies if it were really all about luck, that can’t be ruled out entirely.

Here’s one back-of-the-envelope calculation of odds: let’s assume that those companies were independent chances, and the chance of a company being financially successful as a startup is only one in 10 (a fairly common rule of thumb among venture capitalists). Then the odds of my having five exits purely by chance would be roughly one in 100,000.

However, the 1 in 10 rule is mostly applicable to early-stage startups. I’ve been principally involved in scaling up startups that have found product/market fit, which significantly lowers the risk. If we arbitrarily say that the failure rate of later-stage companies is only 50%, then the odds of my five exits happening purely by chance is roughly 1 in 32.

Whatever the exact odds, it is possible that I just bumbled into all of that success. Certainly, I’m aware of having worked with people who seemed to just be in the right place at the right time. I can think of a person who was in sales management at one of these companies who had apparently made a ton of money previously, made a ton of money working alongside me with no discernible skills or talent, and went on to another lucrative role elsewhere after that.

Being in the right place at the right time, multiple times in a row, suggests either luck or skill. In the world of careers, we don’t get tightly controlled experiments that we can re-run as needed – so it’s inherently hard to distinguish between luck and skill.