Someone asked me lately how I assess the role of luck in success and failure of an enterprise at the different stages of its development. Well, let’s try and ponder this a tad here.
Let’s first have a look at how luck works for a person and switch to talking about company level down the road. I believe that luck (random positive events) plays a paramount role. People find the love of their life quite by accident. An accidentally read phrase can change our whole worldview. Random incidents radically change our lives. Long story short, lots of things happen beyond our control, lots of things are pure luck. Or lack thereof.
I often recall a passage from one of the greatest Russian novels, The Master and Margarita by Mikhail Bulgakov. It’s about randomness: “Man is mortal, but that would be only half the trouble. The worst of it is that he’s sometimes unexpectedly mortal—there’s the trick!” I think of this real oft. Even when I leave the office, I avoid saying “see you tomorrow”—that’s a strange irrational superstition, for I’m not a superstitious person. The thing is, I have no idea what will happen next week or next month, no idea how my work will change. The uncertainty of life, the ephemerality of control are very apparent to me, resulting in my sometimes paradoxical fatalism.
We all tend to overestimate personal contribution—because as humans, we like being in control of everything, including business success. Consequently, we overlook the role of (un)lucky coincidences in life. We forget what happens at random. Later on, our brains skillfully construct explanations for what has occurred by linking random events into illusory patterns “justifying” life success or failure.
Simple example. How often have you tried to explain your choices rationally? The choice of profession, company, or, say, investors: we try to reason logically. But usually, there’s just no logic in how we choose. It’s good fortune or bad one. I became a layout designer once just because I couldn’t find any other job back then. I started working at Solo for the exact same reason (this was the first team to give me an opportunity to work!). We’ve found our first investor through my business partner’s personal network after he happened to have dinner with some other entrepreneur guy. The point is, it could all have gone very differently. I could have become a system administrator or a project manager at some multinational company (there was an offer) never get to the right place job-wise or never find an investor at all. Every event in this sequence was random, dumb luck.
For some reason, everyone is so hyped about personalities and their accomplishments. On the contrary, I think that simple coincidence eats personalities for breakfast. For sure, you need perseverance, some kind of talent, and so on. But do all stubborn, talented people achieve their goals, obtain success and wealth? That probably happens much less often than the shared myths make us think. Immensely talented people get hindered by coincidences, a banal lack of luck. All kinds of assholes get the right chance and excessive honors.
Obviously, at the early stage, any startup depends on luck very heavily. With just a few people in a team, the personal luck of each person plays a very significant role for the whole enterprise. If the only developer suddenly gets seriously ill, the company couldn’t release and launch a product. It will fall short of customer’s expectations and die (the company, not the developer, I hope!). Or, say, a young company couldn’t find the right opportunity to market their product and was showing it to the wrong people all along—bad luck, try again! What if you accidentally show the product to a random CEO, and they immediately got obsessed with it? What if they give you a completely unexpected (but damn cool!) use of your product? That’s luck, good for you! Do you now see how one random chance can have a great impact?
Most companies rely heavily on immediate luck, not on skill or innovation. Companies that become leading are mostly very fortunate to start the right business at the right time and achieve what’s called early success. I am sure: without Microsoft or Apple, we’d have perfect operating systems and laptops just alright. Without Einstein, someone else would have discovered the theory of relativity. The entire evolution of technology and science is like an avalanche. The role of individuals and companies accelerates it by a couple of years at best. We enjoyed the luck factor launching Targetprocess when the market for flexible project management systems was all hot. We were among the first products out there. Entering this market now is tricky—companies like Hygger (formerly, Atlaz) have experienced that change.
I must note that being way ahead of the time also usually results in a commercial failure. Being too innovative is, ironically, bad luck. Many products were ahead of their time. Tablet computers have been around for a long time, but only the iPad has become a hit. It makes no sense to be ahead of others by, like, twenty years—the product will simply have no market. You have to work right on the edge. The edge of chaos is where all the fun happens.
As the company grows, the role of luck in success shrinks. Bureaucracy enters the scene. Decisions become more and more rational instead of being taken because of a gut feeling. The sudden death of individuals cannot influence the streamlined processes anymore. New problems occur, having to do with clumsiness, excessive caution, and being blinded by success. At this stage, a company leaves the edge of chaos and plunges into a soggy routine. And this is when young, daring, and lucky companies come with a shovel. They come to dig a grave for those who were once so fortunate.
That’s all, folks. 🖖