I agree with the premise of this article. In my nearly 40 years as a (self employed in 3 of my own businesses) software developer and watching many companies make it (or go under), it appears that pure, unadulterated luck is a massive factor in whether a company makes it huge, or just potters along.
It is sad that many founders or business owners tend to gloss over this fact when they go on to write blog posts or write a book or go on the speaking circuit when they have 'made it'. It is easy sometimes to attribute to 'good old fashioned hard work' what can be attributed to pure luck.
Running a successful business is somewhat akin to a lottery.
[This is Julia, the OC] In some ways, this article is a response to this sentiment. It's true that luck is an important factor, but you can make your own luck through hard work. Being successful with startups is not like winning the lottery, because lottery winners just sit around holding a ticket. Startup founders are constantly working to attract more luck - or lightning - to themselves.
I appreciate the sentiment of 'making your own luck', and while I think that it is true to a certain extent, there are also the opposite cases.
Let's look at one totally random example off the top of my head - Grumpy Cat. Now, GC's owners basically sat there while the owner's brother I believe, posted the cat's picture on social media, which turned into a storm that netted GC's owners multi millions of dollars in marketing deals. Sure there was probably some hard work after the fact in managing those deals, but initially, it was just pure dumb luck of the cat's picture being posted in the right place at the right time to ignite the response of the world. Tons of other cat pictures go unnoticed every day.
I had a client many years ago - a nice chap, but not what I would call a good businessman. He had trouble stringing a coherent sentence together, and had a bad drinking and gambling problem. Only he happened to start an aboriginal art retail business right when 'Crocodile Dundee' came out and Australian Aboriginal Art was the big thing. He basically had a $1M annual turnover business overnight, and had no clue how to manage it. In fact, we were called in to run an audit because some of his employees were embezzling truckloads of money from him right under his nose. He just lucked into a thriving business but not due to any sort of acumen or hard work. Next door to him there was an auto mechanic business I also worked with whose owner (who was in a wheelchair BTW) worked 80+ hours per week to struggle to put food on his family's table. I found it hard to look at these two businesses literally running side by side, and say that it was anything but dumb luck that separated them, regardless of hard work.
My understanding actually is that the ridiculous Grumpy Cat thing was actually a pretty purposeful and managed marketing campaign to build a minor meme into a brand. I believe it might actually be an example that proves the opposite point from what you're trying to make here.
these are not startups though and you can't compare them to a startup.
sure, luck is a factor in everything but it's not a make or break factor in startups. in startups you make your own luck. you work hard, suffer the small wins and losses, until you get yourself in the right place at the right time. some people find that opportunity early, some later but both get there because they worked at it. even Uber founders had to work hard for it. and don't even get me started on Airbnb's founders
[Julia again] Y'all should read the article! These examples of "lightning striking" absolutely happens to people that don't work hard for it. But knowing and appreciating the role of chance doesn't mean that hard work doesn't pay off, because hard work can make you more likely to experience a stroke of luck.
The question is the extent to which that is true, and whether or not it's the primary factor involved in a success.
Work hard => success is a simplistic and misleading mythology, not an evidence-based reality. It also leads to toxic relationships with workers, because if a founder or manager believes that more hours = success they'll make some very stupid business decisions and trash the quality of life of some of their employees for no good reason.
If hard work (how is that measured?) isn't a primary factor - and plenty of research suggests it isn't - then the realistic way for founders to increase their chances of success is to understand that factors that actually contribute the most, and maximise those.
What you're saying is true. But it's also true that some decisions make your luck surface large, while doing nothing gives you no chance of being hit by the lightning. In fact, some strategies to increase your luck surface scale, and produce greater than linear surface area as a function of effort, unlike a lottery.
Oh I agree that you can stack the odds in your favour, by working smarter/harder etc. or jumping on opportunities - but end of the day, that is essentially the equivalent of buying more lottery tickets to shorten your odds, isn't it?
There are several properties that make the lottery and startups different, if we really want to take seriously the attempt to analyse the degree to which the analogy is a faithful representation. For one, the lottery is winner-take-all, while it's totally possible to succeed in a startup as long as you don't artificially clip the failure threshold at some insanely high bar (especially if you choose to not pursue a winner-take-all market, like building the next social network). Despite the many startups that fail, you're still more likely to make a living betting on that than a lottery.
There is definitely a case to be made that taking a normal job vs doing a startup wins in terms of opportunity cost. But to compare it to a lottery is obviously an exaggeration.
There is the matter of skills as well. There is no skill in buying lottery tickets[1]. But there are many skills that help you succeed at startups(technical/domain knowledge, persuasion, marketing etc.). You have control over the skills you develop. The quality of your work is a reflection of your skill. And at the very least high quality work in the right context has slightly better than random chance at succeeding. Of course, the right context is so so important, and the multitude of factors that go into that are what probably make people draw the confusion that it's all luck.
Just because luck can create some overnight succeeds stories doesn't mean that all successes were purely created by luck. You have to be in a position to benefit from a lucky break in the first place.
[1]I'm not counting cases where people exploited weak randomness in ticket numbers to predict wins
Sorry to nitpick, but lotteries are generally not winner-take-all. There are tiered rewards based on "amount of luck" (number of numbers matched), and there is no cap on the number of people who can "win" simultaneously. Large jackpots are often shared by multiple winners.
"The harder I work, the luckier I get," is the quote I've heard. You prompted me to research it and I found this article [1] suggesting that the version "Diligence is the mother of good luck" may be the oldest attested quote for this concept in English, occurring in the late 16th century.
I don't doubt that a version of it goes back much further. It seems like something one might hear in ancient Athens, or from some of the Roman humorists.
I often think that people conflate bad product with bad luck. Specifically wrt tech startups/companies, there are way too many copycats that churn out half baked and substandard products that are yet another version of an already established and popular product. Further, there won't be many important things that set them apart from the products they intend to siphon off the customers from. These are destined to fail.
If anything, some copy cats are indeed lucky and take off, leaving most wondering how exactly did they succeed. Of course, these lucky ones later cobble together stuff that makes then a bit different from the competition, possibly eventually acquiring big competitors.
The only thing I agree with is that weak promotion and marketing can harm the success of a good product. That said, it is my firm belief that quality always wins. A really good product will become a sleeper hit sooner or later if it has gathered enough mass.
If you have patience and persistence, this is the secret:
“Put up as many metal rods as possible” x Time
I made a list of 30 things we need to do to reach 1 million users. I didn’t think we’d ever reach a million users since we were only getting like 100 signups/day.
Today, we have 3.5 million users and getting 3000 signups per day. It took us 12 years to get here but when I look at that list I see that I have tried everything on it but pretty much none of them really worked. I have tried hundreds of other things and found a few things that worked.
That's a product-market-fit. Promotion will get you sign ups, but if there's no demand for your product, no amount of lighting rods is going to save you.
My favorite analogy to describe "luck x startups" is that it's like your first game of darts, except you only get 5 shots, and then you can never play again. Theoretically it's skill-based, and if you had the time/resources to practice you could perhaps nail the bullseye 85% of the time, but your first 5 throws are mostly luck, and that's all most people ever get when it comes to startups.
Also, even though you theoretically are better when throwing #5 (4 shots of experience and learning), it's still random enough that you could score worse than throw #1
I'm Eric, the other cofounder at Kapwing! Our product vision for now is an online video editor (think iMovie in the browser).
We're definitely not a pre-planned acqui-hire play haha. We're completely bootstrapped and just trying to build a website that can pay our bills and make money so we don't have to go back to the corporate grind. We would love to build a reputation for the product but it's hard and takes time. For now, we just wanted to share about our startup experiences along the way!
The video editor itself might not be too relevant for the HN community but I think our startup learning lessons definitely can be.
Yeah definitely (I'm Eric, a co-founder at Kapwing). Julia and I have so many advantages it's crazy. We are really lucky to start out with. I appreciate your feedback and hope you know that we often think about how we can be more cognisant and responsible with who we are.
Mum ran a small successful chain of restaurants for 20 yrs, she pretty much agrees, a lot of stuff happens, business isnt one way up or one way down as most people believe but mix of sudden huge ups and downs over way too many yrs.
However have to be very prepared, risk tolerant and actually have something that stands out and attracts customers and you're either quarter or halfway there.
Luck in business is more like societal movements, consequences and jerks that catch people by surprise
Hmm... this isn't pure luck when you actually already move in circles that involve Wall St. execs and can get to Princeton in the first place. There is a base-level of 'good breeding' he could use to launch from.
You need some luck to build a billion dollar business. You just need work ethic and persistence to build a million dollar business. And I would suggest that anyone who looks down their nose at the latter has never owner a million dollar business.
I think you need more than just work ethic and persistence to build even a million dollar business. Those things help you with execution, but you also need a decent idea that is valuable to others and also motivating and exciting to you.
For a million dollar business, just pick any existing million-dollar business, and execute well. Consulting shop, restaurant, laundromat, etc. Billion-dollar companies need brilliant ideas and new paradigms, million dollar ones work very well with decades-old ideas.
Luck is a catalyst. A lot of success stories are really stories of people getting extremely lucky if they're honest. But those stories wouldn't exist if those people hadn't been in positions where they could have taken advantage of those lucky circumstances or if they hadn't taken the right actions to do so.
It is sad that many founders or business owners tend to gloss over this fact when they go on to write blog posts or write a book or go on the speaking circuit when they have 'made it'. It is easy sometimes to attribute to 'good old fashioned hard work' what can be attributed to pure luck.
Running a successful business is somewhat akin to a lottery.