Why Sir Richard Branson Was Wrong
Sarah Jons 
Entrepreneurs need to understand the principle of return on luck and develop a new mental muscle
Entrepreneurs need to understand the principle of return on luck and develop a new mental muscle. Every entrepreneur has heard (or been told) that success requires the right combination of skill, experience, timing and luck. Many successful people, including Sir Richard Branson, say that luck is a big factor in business success. In his autobiography, Losing My Virginity, he says:
To be successful, you have to be out there; you have to hit the ground running. And if you have a good team around you – and more than a fair share of luck – you might make something happen.
I believe he is very wrong. It is not luck, chance or ‘more than a fair share’ of anything. I am much more in line with the great Louis Pasteur‘s saying that:
Chance favours only the prepared mind
So what exactly is luck and how does it apply to entrepreneurs? People who consider themselves lucky have a way of dealing with chaos and complexity that unlucky people do not appear to be able to cope with; Branson, I am sure would acknowledge that chaos and complexity are two things in abundance in any startup business.
Success is nonlinear and we can’t know how something will turn out at its outset. We tend to ‘back fill’ and understand things after the event. Have you ever had a ‘lucky’ number? That reoccurring number that pops up wherever you go? Hotel rooms, phone numbers, goal scorers, street addresses: it’s haunting presence cannot be escaped. Maybe you are in your car, absently humming a song. You turn on the radio. A sudden chill prickles your spine. That same song is now pouring from the speaker.
Luck or coincidence, you tell yourself. Or is it? Let’s do the mathematics. For most mainstream scientists, experiences like this, however strange and recurrent, are nothing but lawful expressions of chance, a creation (certainly not of the divine or mystical) but of simply that which is possible. Ignorance of natural law, they argue, causes us to fall prey to superstitious thinking, inventing supernatural causes where none exist. In fact, say these statistical law-abiding rationalists, the occasional manifestation of the rare and improbable in daily life is not only permissible, but inevitable.
To understand this, take a well-shuffled deck of fifty-two playing cards: the mathematical odds of dealing a hand of thirteen specified cards are about 635,000,000,000 to one. This means that, in dealing the hand, there exist as many as 635,000,000,000 different hands that may possibly appear. What statisticians tell us, though, is that these billions of hands are all equally likely to occur and that one of them is absolutely certain to occur each time the hand is dealt. Thus, any hand that is dealt, including the most rare and improbable hand is, in terms of probability, merely one of a number of equally likely events, one of which was bound to happen.
Napoleon was once famously asked:
- Would you prefer courageous or brilliant generals?
- He replied: Lucky ones.
That might be true in retrospect, post battle, post success. Luck may play a part in success, but not in a random way; being at the right place, at the right time, with the right product certainly helps, but you also need the strategy.People who work hard get the chance to open more doors than others, and you never know who or what might be standing behind the next door.Over the past decade, some observers have begun to understand luck not as a random, uncontrollable phenomenon but more as a behaviour that happy, successful and amazing people use, whether consciously or subconsciously. Psychologist Richard Wiseman studies lucky and unlucky business people as part of his research. His goal is to isolate the traits that lucky people possess and demystify them so that everyone can emulate them.
Any group of entrepreneurs whom describe themselves as ‘lucky’, he says, are particularly good at noticing and capitalising on opportunities as they arise. They act on gut feelings and hunches, but only after honing their intuition. It seems those that label themselves ‘unlucky’ tend to be narrowly focused and goal-oriented. If there are new opportunities that arise while they are pursuing something else, they are more likely to ignore them than grabbing them with both hands.
It seems that this quality to change gears, rapidly adjust business plans and lose ideas that are not working out is something that successful entrepreneurs do consistently. Nearly every business owner has a story about how an original idea had to be revised or ditched along the road to finding one that works. Rather than despairing or freezing when one model is proven wrong, these individuals quickly recalibrate and redirect their efforts.
According to Wiseman’s research:
- Lucky people maximise chance opportunities: They create, notice, and act on opportunities; like by meeting lots of people and being open to new experiences.
- They listen to their hunches: practices like breathing and meditation allow them to clear their mind of thoughts and act more quickly.
- They expect good fortune: Anxiety precludes you from seeing possibilities, a calm optimism allows you to spot them.
So these abilities or skills are often taken with a sense of hard word and continual practice. By working hard (and being prepared) entrepreneurs can improve their chances of success. The saying, often attributed to Gary Player, seems to resonate:
The harder you practice, the luckier you get.
Indeed Gary Player probably did not craft this aphorism that links practice and luck; he tells an anecdote about his fellow golfer Jerry Barber saying it though.
There is an interesting asymmetry between good and bad luck. A single stroke of good luck, no matter how big, cannot by itself make a business or entrepreneur successful. But a single stroke of extremely bad luck, or an extended sequence of bad-luck events that creates a catastrophic outcome, can terminate this desire to be successful. According to the wonderful Jim Collins in Great by Choice, it is all about Return On Luck or ROL.
After finishing our luck analysis for “Great by Choice,” we realised that getting a high ROL required a new mental muscle. There are smart decisions and wise decisions. And one form of wisdom is the ability to judge when to let luck disrupt our plans. Not all time in life is equal. The question is, when the unequal moment comes, do we recognize it, or just let it slip? But, just as important, do we have the fanatic, obsessive discipline to keep marching, to push the opportunity to the extreme, to make the most of the chances we’re given?’
The so-called lucky entrepreneurs were certainly not sitting around waiting for luck to find them. They appeared to be working constantly to better secure their success once those lucky opportunities fell from the sky. Let’s look at the numbers who believed luck had no or minimal impact on their company’s success. Approximately 7% were working on a business plan or doing market research (compared with more than 20% in the lucky category). Only 17% were expanding their sales effort (versus 41% who were lucky). Some 29% focused on their value proposition (versus the 41% who were lucky).
Luck’s Partner: Hard Work
Entrepreneurs who believe luck had a big impact on their success (represented by red) were more heavily involved in business-growth activities than those who thought luck had no impact (blue). The chart shows the activities that both camps were engaged in before or during lucky breaks. SOURCE: Beth Goldstein, Lucky By Design
Getting a high return on luck requires throwing yourself at the luck event with ferocious intensity, disrupting your life and not letting up. That’s not luck: that’s return on luck. Luck comes to those who are engaged in the right activities, to thrive, not just survive.
“My mission in life is not merely to survive, but to thrive; and to do so with some passion, some compassion, some humor, and some style”
― Maya Angelou
Luck be my Lady Tonight. No, Sir Richard. No.
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