I have written a couple of times before about luck. First I leant on Taleb to think about the necessity of distinguishing between luck and success when evaluating decisions and performance (focus on the process not the result) and then Andreessen to discuss the possibility of making luck for yourself (keep busy to maximise the chance of being in the right place at the right time).
These are important issues for a VC like myself and so I was interested to read Ronald Cohen’s chapter on luck in The Second Bounce of the Ball. Ronald Cohen was the founder of Apax and is the Grand-daddy of the UK venture and private equity industry.
Cohen’s chapter on luck is entitled Chance, perseverance and luck, and is sub-titled Luck is seldom just a matter of chance. He understands these issues intimately. Moreover, the differences between luck and skill and deserved and un-deserved luck are hard notions to get across, and the following three passages from his book capture them brilliantly.
Firstly on perseverance:
The first rule of luck is that you should persevere in doing the right thing. Opportunities will come your way if you do.
Entertainment entrepreneur Haim Saban provides an … example. He had gone through a challenging time as a television and video product salesman. He was in Japan when, by chance, he say Power Rangers on television. He realised immediately that the programme would have international appeal and he bought the world-wide rights to it. He sold it to broadcasters all over the world and it became a television sensation. The success of Power Rangers enabled Saban to build his business and then merge with a division of Twentieth Century Fox to create Fox Kids. In 2001, he sold out to Walt Disney for $5.3bn. The deal made him a rich man.
You could say that Haim Saban was lucky to be in Japan and to see Power Rangers when he did, before someone else bought it. But many of his competitors were not as assiduous in their travels as Saban. They were not in Japan. Those who were, did not see in Power Rangers what he was able to see in it. The fact that he was in the right place at the right time was a matter of perseverance, not luck. Saban was an ambitious entrepreneur who was in search of a product that would have mass appeal. He wanted to break away from being a mere salesman of other people’s products. He came to the conclusion that he had to own or control the rights to something big. He was constantly on the lookout. He found what he wanted in Power Rangers.
Secondly, Cohen on networking:
Perseverance is only the first element in the luck equation. The second is networking. I would say that luck is directly proportional to the size and appropriateness of your network. For many years, I was out several evenings a week with clients and contacts. I intuitively understood that such networking was an important part of doing the job. The more active you are, the more opportunities will come your way. The more people you know in your sector, the more often you will encounter circumstances that help you cause.
And finally he quotes from Napoleon:
Napoleon famously required his generals to be lucky above all else. But as Napoleon knew well, a great general does not depend on luck. He anticipates the rain, he takes into account the ‘lucky’ downpour that might trap his enemy in the mud.
We all want to be lucky, and to work with other people that are lucky, but luck is no substitute for hard work. Rather if you want to be luckier than the next person you had better to be working harder than they are.