Luck plays a role. It sure does. I have met entrepreneurs who, out of nowhere, receive an acquisition offer 6 months after launch of their beta version just because it turns out that what they’re working on is in line with a bigger company’s short term plans.
There is that and there’s the 10 years lucky moment where, all of the sudden also out of nowhere, a series of failures or small successes turn into a massive worldwide victory that nor the entrepreneur or anyone in the world would have ever bet on it being this big; John Hanke, the mastermind behind Pokemon Go should know. Entrepreneurship is a game of attrition: good things sooner or later happen to determined, persistent and tenacious entrepreneurs.
But why? it’s true that persistence pays off in any field whether it is entrepreneurship, health, family, income, etc. but what explains that most if not all persistent entrepreneurs are eventually successful? Below are three facts that show why perseverance is a strong determinant of entrepreneurial success.
1. Extraordinary opportunities present themselves at unexpected times
And it’s for the extraordinary entrepreneur to seize them.
As I was looking for backed research about the role of luck in entrepreneurial success, I found an interesting post that I think does a good job at explaining what the true meaning of lucky moments is for an entrepreneur. Jim Collins and Morten Hansen studied luck as an event and not some “indefinable aura”. Here is a passage from their NY Times essay:
“Thousands of people could have done the same thing that Mr. Gates did, at the same time. But they didn’t.
The difference between Mr. Gates and similarly advantaged people is not luck. Mr. Gates went further, taking a confluence of lucky circumstances and creating a huge return on his luck. And this is the important difference.
Luck, good and bad, happens to everyone, whether we like it or not. But when we look at the 10Xers, we see people like Mr. Gates who recognize luck and seize it, leaders who grab luck events and make much more of them.
This ability to achieve a high ROL (return on luck) at pivotal moments has a huge multiplicative effect for 10Xers. They zoom out to recognize when a luck event has happened and to consider whether they should let it disrupt their plans. Imagine if Mr. Gates had said to Paul Allen after seeing the Popular Electronics article: “Well, Paul, I’m kind of focused on my studies here at Harvard right now. Let’s wait a few years, and then I’ll be ready to start.”
Few things to learn here. First, there is no such thing as ‘right time’ to start. Second, the more open for change we are, the more likely we will be willing to seize unexpected, undervalued opportunities when they present themselves. Finally, the more involved we are, the higher our chances of being presented with lucky moments we will be. Therefore, luck, in one way or another, is dependent on entrepreneurial perseverance, open mindedness and willingness for change.
2. The best ideas are “noticed”
Paul Graham argues that the most successful startup ideas grow naturally out of the founders’ own experiences; they’re “organic”. This simply means that the best way to come up with startup ideas, improve existing ones or even make better managerial decisions is by experiencing, noticing and keeping an open mind. Paul notes that ideas develop through external stimulus that hit a prepared mind. If we think about it for a second, it seems like the best way to get or come up with the best ideas is similar to the luck factor which requires consistency, open mindedness and willingness for change. Recognizing the best opportunities at the right time is thus a result of entrepreneurial perseverance.
3. “A river cuts through rock, not because of its power, but because of its persistence.” James N. Watkins
Time and timing are two different things. Time is very powerful however when combined with the right timing, wonders can happen. The truth is that we almost can never seize an opportunity of a life time if we are not in the game for a while. The same applies to water trying to cut through rock. It hits the same spot 24 hours hour for decades and centuries but only by doing that that it suddenly detects a week spot that it can break with less efforts.
Think about all the opportunities we’re currently missing in areas different from ours but because we haven’t hit walls, objections, losses and disappointments, we’ll be dead last in getting a shot at them. And I am referring to as small as a highly underpriced property in a growing area or a promising venture that is seeking a few thousand dollars investment with a potential of turning into a billion dollar return, Chris Sacca should know.
“It’s not that I’m smart, it’s just that I stay with problems longer.” Albert Einstein.