In my last article I discussed the factors in life and business that we have no control over, but still affect us in significant ways. In this article, I want to go one step further and talk about “Luck” and how we can use it for our own benefit.
Why do we need Luck?
Two people are applying for the same position. Both have about the same GPA from the same university. Both have a good background and experience. Only one will get the job–do you think that the interviewer will know which one is better skilled for the job? He`ll probably base his decision on factors that have nothing to do with the candidate’s skills. It might be gender, age, skin color, the ethnicity etc. You`ll never know what the final decision was based on.
People will tell you that you don’t need luck. They will also tell you that the only thing you need is ambition and hard work. I`ll give you all the time in the world, but you still won`t be able to convince me that the last person who won the lottery`s jackpot had high ambition and worked hard for that. I`m not trying to tell you to play the lottery now, but this extreme example can show us that luck is a factor in life that should be taken under consideration and for sure you want it to be on your side.
Turn your luck into calculated risk:
The lottery is not the place you want to put effort to increase your odds. This is because there is nothing legal you can actually do in order to change your odds of winning – every ticket you buy has the same odds of winning, but if you buy all of the possible tickets you will end up losing money – not a great deal. You need to increase the odds in scenarios which your actions can actually make this difference.
If you own a startup, and your main goal is to sell it to a big company, you`ll need to go out and meet with people. Make sure everybody in the industry knows you. The more people that know you, the bigger your chances are to make the big exit. There might be a chance of 1:1,000,000,000 (this number has no statistical evidence) that a stranger who has no idea who you are or what you`re doing will come up to you and ask you “Hello, is there a chance that you`re working on this startup and you want to sell it?” But if more people know what you are doing, the odds increase magnificently. Focus your efforts in the right directions and in the right places in order to maximize your chances. In this example you control your luck by letting people know about your business.
In a different example, I want to invest money in the stock market. There is a constant risk in the market; we never know what`s going to happen tomorrow, things changes constantly and rapidly. New information sends the stocks up and down without prior notice. If you`ll buy one stock, you`re relying mostly on luck. We have seen good stocks go down in good market and we have seen bad stocks flying in a bad market. Nothing we can do about it. If we want to control the luck and turn it into a calculated risk, we need to have a wide and diverse portfolio.
The statistical error:
I personally look at good luck and bad luck as statistical errors. If we`ll look at the normal distribution, I believe that if something occurs on the right side of the distribution that’s a result of good luck, if something occurs on the left side that’s a result of bad luck. The middle is where we expect the result under normal circumstances. At this point, we want to put our efforts in moving to the right side of the scale, creating, by doing so, more “good luck”.
The CEO Game.