Lady Luck

When Kevin Kelly, author and founder of Wired magazine, turned 68 he created a list of 68 bits of advice and shared it online. Inspired by this, my friend Ian and I each created a list of 29 bits of advice and shared it with each other.

One of the pieces of advice on my list was to acknowledge the role of luck (or chance, randomness, or whatever you want to call it) in my life. I have been both burned and blessed by things outside of my control. Unpredictable random events impact our lives more than we realize.

This is an idea worth exploring because of its personal implications. At 29, success, wealth, and social status are at the forefront of my mind. And I am not alone. Think about the popularity of magazines such as Forbes, Entrepreneur, Success, and Inc.. Think about all the writers, podcasters, and bloggers that explore the habits of elite billionaires.

The perceived utility of these materials is rooted in the underlying assumption that these people’s accomplishments are caused by their personal characteristics. We attribute success, wealth, and social status to talent, skill, hard work, persistence, mental toughness, resilience, any other trending trait. Society aims to find causality between personality traits and accomplishments so that we can model the behaviors of the successful to achieve the same outcomes.

But is life that simple and deterministic? What about the role of luck?

Life Is More Random Than We Think

The core idea I’m getting at can be reduced to this: outcomes of many things in life are influenced more by randomness than we think. Put another way, we often confuse luck with skill, randomness with determinism, and coincidence with causality.

The level of randomness we are exposed to depends on the complexity and variables that influence the outcome we want. The more complex and multivariate a process is, the greater the impact of randomness on the outcome.

Reliving Your Life

Philosopher, author and investor, Nassim Taleb offers a great example to crystalize this point. Let’s compare the role of randomness in the lives of two people: John Doe A and John Doe B.

John Doe A is a dentist. He has achieved a modest level of success, wealth, and social status by drilling teeth. At the age of 50, after years of work, he is worth $5 million. Now, if John Doe A were to relive his life as a dentist 1,000 times, the range of possible outcomes would be narrow. The best case would be that he becomes a celebrity dentist in Los Angeles, charging more per procedure. The worst case would be that he ends up drilling teeth in small-town Ohio. As a dentist, John Doe A has more control over his outcome than other professions, leading to a narrower range of possibilities.

Let’s now examine John Doe B, a janitor who has a habit of playing the lottery. With his most recent ticket purchase, he won $5 million, quit his job, and moved next door to John Doe A. But what would happen if John Doe B had to relive his life a 1,000 times? The odds are that he would continue to provide janitorial services and waste money on fruitless lottery tickets.

Dentist > Founder?

This is an extreme example, but it is being used to prove a point. From a probabilistic viewpoint a typical dentist is wealthier than a famous A-list actor, a hedge-fund manager, or a billionaire tech entrepreneur. Why? Because success in those paths is highly influenced by randomness.

Let’s look at an entrepreneur like Mark Zuckerberg for example. A start-up has a high probability of failure and a high degree of complexity – its survival is influenced by numerous variables, many of which are outside the entrepreneur’s control. Yet, some succeed and surpass the founders’ wildest expectations. They achieve an unfathomable level of success, wealth, and status. Now, if Zuckerberg had to relive his life 1,000 times, in how many scenarios would he (1) invent Facebook and (2) make it the company we know today? The range of possibilities is massive, and the odds are that he would end up with a vastly different outcome.

Blessed by Luck

I’m fortunate enough to have been blessed by luck numerous times throughout my life. One moment that comes to mind is when I was in law school going through the law firm recruitment process.

Having a successful outcome during law firm recruitment is a function of two things: (1) grades, which determine whether you will be granted interviews at firms, and (2) likability, which determines whether lawyers will want to hire you, train you, and spend time with you.

While you have a large degree of control over your grades and likability, part of the outcome is out of your hands. For instance, you can’t control whether the lawyer you will be meeting with had to pull an all-nighter and will be exhausted for your interview.

My experience during law firm recruitment was positive. But how much credit can I take for the outcome? Sure, I worked hard and prepared, but I also had some major things in common with my interviewers that were based purely on luck. How much did this contribute to my likability? It is hard to say exactly, but I am positive that it played a significant role.

I also saw classmates who had grades as good as mine, and who were more likable, end up empty-handed. If they had to relive the recruitment process a 1,000 times, would their outcomes be any different? I am confident they would.

Let me emphasize this: skill, effort, intellect, and other positive personality traits matter. But the key is to understand that they are necessary, not sufficient. They do not guarantee success, especially in fields that are more predisposed to randomness, such as entrepreneurship or investing.

Taleb thinks of success as a range of possible outcomes: “Mild success can be explainable by skill and labor. Wild success is attributable to variance.”

Living with Randomness

Why do we discount the role of chance in our lives?

It is because of how we view the past. We all suffer from survivorship bias – only remembering and accounting for the winners and not the losers – and we draw causal conclusions based on this.

For example, Bill Gates is a winner. So we study his life, determine that he has qualities X, Y, and Z and conclude that these qualities caused him to be a winner. But what about all the other entrepreneurs who had the exact same qualities and started businesses that failed? We don’t know their stories nor their names, so we ignore them. They are not part of the dataset we used to conclude that qualities X, Y, and Z cause success.

The insight here is that we need to avoid jumping to conclusions regarding what causes wild success.

What does this all mean for me on my quest for success, wealth, and status?

The key realization I have had is to focus on the process rather than the outcome. And while I am aware of how trite that insight is, after understanding the role of luck in life, it resonates with me.

By focusing on what is within my control (hard work, talent, skills acquisition, etc.), I can narrow the range of possible outcomes and skew them toward positive expected values. But I can’t guarantee anything.

So, I won’t beat myself up if I don’t become a billionaire, as that is outside of my control. But if in 10 years, I happen to be on a private jet sipping champagne, I will be sure to toast Lady Luck.

Notes, Inspirations & Additional Readings:

  • Thanks to Charlotte, Kerri and Darragh for their review and feedback.

More Essays