Understanding luck

By August 15, 2007Entrepreneurs

I have been thinking a lot recently about luck and the role of chance in our lives. An output of that was this post on the difficulty of distinguishing between lucky success and deserved success. My main point then was that if you are to be consistently successful it is critical that you understand where you have been lucky and where you got your result without relying on luck. You can’t rely on luck forever, and maybe you shouldn’t rely on it at all.

So I was interested to read Marc Andreessen’s post which examines luck from the other side – thinking about the extent to which you can make your own luck.

I wasn’t disappointed.

(But then this is Marc we are talking about – he has built two billion dollar companies and his third looks like it might go all the way too. In the words of Dick Costello “you start one monster company, maybe you were lucky, maybe you were in the right place at the right time. You found two billion dollar companies? You officially know what the hell you are doing. Nobody is that lucky.”.)

Citing the work of Dr James Austin in Chance, Chance, and Creativity Marc talks about four types of luck.

The first is blind luck – bought a winning lottery ticket type luck. That has to be the first type – it exists, no doubt about it. But as a concept it doesn’t get us much further. It is easy to identify when it happens and you can’t do anything to increase its incidence.

The second is luck that comes out of undirected action. For sure if you are busy doing stuff you increase your chances of being lucky – you don’t stumble on things if you are sitting down. This is where things start to get a bit confusing when you try and understand the role of chance in success. To my mind if you are busy in an unfocused fashion then you have made your own luck to an extent, but probably not in a way that is repeatable. Few would argue with that statement, I guess, but the challenge comes in determining the extent to which the activity was unfocused.

Which brings me to the third type of luck – good fortune that comes out of focused busyness. Once again you increase your chances of being lucky if you are doing lots of the right sort of things. Now we are into the realm of making your own luck in a repeatable fashion. You could think of this as repeatedly putting yourself in the right place at the right time.
The fourth type of luck as per Dr Austin I would almost say isn’t luck at all, but good intuition. Austin describes it thus:

Chance IV is the kind of luck that develops during a probing action which has a distinctive personal flavor.

Chance IV comes to you, unsought, because of who you are and how you behave.

You could think of this as putting yourself in the right place at the right time with an idea about what might happen. If someone was successful as a result of Chance IV I wouldn’t hesitate to back them to be lucky again.
To me this is a powerful framework for analysing the role of chance in the success of myself and others.

It also has implications for recruitment more generally – it helps explain why energy is such an important quality in an entrepreneur. The busyness that comes from having lots of energy is important for all types of luck, bar blind luck – and we all need luck.

As Marc says, it also places a premium on curiosity and the ability to synthesise experiences from lots of different areas. These are the capabilities which enable people to move to Chance III and Chance IV – i.e. give them the instinct to focus their activity on the right areas and as to what might happen if they do that. This can often mean the difference between activity and progress.