6 Ways Luck Shapes Entrepreneurial Success
I was on a plane recently and I was chatting with the person next to me. It just so happens that they are the founders who had a big rollout at one company and are now leading a fast-growing AI startup. He has a lot of experience in his entrepreneurial journey, so I asked him what made him successful. He said the key ingredient is luck.
I knew that serendipity, another word for luck, played a role in our success or failure, but I had no idea how much it played.
It got me thinking, yes mind is important. Yes, knowing who our customers are and what they need is very important. We have to build a great team. We need persistence and a few other ingredients. But also luck.
We are in the elevator and walking the customer, who buys this “changes our life”. Or later a future investor who writes a check to give us the cash flow we need for 6 months. Stories like this happen.
Luck plays a role in small business success for sure.
Luck in business manifests itself in a variety of ways: timing the market, unexpected opportunities, and even avoiding unexpected disasters. While skill, hard work, and perseverance are important, the element of luck often serves as a silent partner in both victory and failure. Realizing this can help entrepreneurs prepare for both favorable and challenging situations.
Unforeseen Business Situation
Starting and running a business is inherently risky, with many variables beyond the control of entrepreneurs. Market conditions can change dramatically due to technological advances, economic fluctuations, or changes in consumer behavior. A product that seems promising today may be obsolete tomorrow due to an unexpected innovation.
Consider the proliferation of video streaming services. While Netflix’s pivot from DVD rentals to streaming was strategic, it also benefited from the timing as internet speeds improved and smart devices proliferated. On the other hand, Blockbuster’s failure to adapt quickly enough wasn’t just bad management—it was also bad timing as the market was changing rapidly.
Right Place, Right Time
Some startups find themselves riding the wave of emerging trends, benefiting from explosive growth almost overnight. Zoom, for example, was in good shape when the pandemic forced millions to work remotely. While the company was well-prepared with a strong product, the global shift to remote work was an unprecedented stroke of luck that fueled its growth.
On the other hand, many well-organized businesses struggle despite having quality products or services. They may enter the market too early, before buyers are ready, or too late, when space is already crowded. Differences often come in time—something that is difficult to predict or control.
Unexpected Opportunities
A confluence of chance and random events can lead to game-changing opportunities. A casual conversation at a networking event could result in an important partnership or investment. The founders of Airbnb, for example, stumbled upon their business model when they rented out air mattresses in their apartment during a design conference. This horrific incident sparked an idea that turned into a multi-billion dollar company.
These moments of calm cannot be planned, but entrepreneurs can increase their chances by networking widely and staying open to unconventional ideas. The important thing is to recognize and act on these opportunities when they arise.
The Dark Side of Fortune
Economic Decline
A recession can destroy even well-run businesses, especially in certain industries. The financial crisis of 2008, for example, led to the collapse of many companies in the real estate and financial sector. Many of these failures were caused not by mismanagement but by an unprecedented economic downturn.
Recently, the pandemic has shown how unexpected global events can upend entire industries overnight. Travel, tourism, and event-based businesses face existential threats through no fault of their own. In such cases, bad luck can overtake even the most skilled and prepared businessmen.
Unexpected Obstacles
Natural disasters, sudden regulatory changes, or global events can disrupt business in ways that cannot be fully anticipated. A startup may lose important data in a fire, or a change in import regulations may disrupt the entire supply chain. The semiconductor shortage that began in 2020, for example, gripped many industries, affecting everything from car manufacturing to consumer electronics.
Although comprehensive insurance and contingency planning can reduce some risks, it is impossible to protect against all possible setbacks. Sometimes, bad luck strikes, testing an entrepreneur’s resilience and adaptability.
Balancing Luck and Skills
Preparation Meets Opportunity
Although luck plays an important role, successful entrepreneurs are those who are willing to capitalize on lucky circumstances. They combine skills, knowledge, and preparedness with the ability to see and seize unexpected opportunities.
Amazon’s success, for example, wasn’t just luck—Jeff Bezos was well-prepared to take advantage of the emerging e-commerce opportunity. He combined his understanding of technology and markets with the booming Internet era. Successful entrepreneurs often create their own luck by positioning themselves to benefit from favorable circumstances.
Learning from Problems
Bad luck is inevitable in business, but strong entrepreneurs use bad luck as a catalyst for growth and innovation. They see obstacles as learning opportunities and adapt their strategies accordingly.
After the dot-com bubble burst, many Internet companies failed. However, those that have survived, such as Amazon and eBay, have become stronger by learning from the crisis and adapting their business models. Entrepreneurs who can navigate and learn from adversity often find themselves in a better position for future success.
The conclusion
Luck undoubtedly influences business outcomes, playing an important role alongside skill, effort, and strategy. Realizing your worth does not diminish the importance of hard work and planning. Instead, it leads to realistic expectations and strong strategies.
Smart entrepreneurs prepare for both good and bad luck. They are always flexible, alert to opportunities, and resilient in the face of adversity. By recognizing the role of luck, business owners can better appreciate their successes, learn from their failures, and navigate the complex business journey with greater wisdom.
Ultimately, while we can’t control luck, we can control how we react to it. The most successful entrepreneurs are those who can ride the waves of fortune and weather the storms of misfortune, constantly adapting and moving forward.
As someone who started 5 companies and sold three of them, being able to adapt and innovate has helped me.
Photo: Envato