Don’t ignore ‘Luck’ it will contribute to your success like it or not!

In the narrative of startup success, the tales of grit, perseverance, and relentless innovation are frequently celebrated. Founders are often portrayed as visionary leaders who, through sheer willpower and exceptional talent, navigate the treacherous waters of entrepreneurship to achieve success. This narrative is compelling, offering a blueprint that others can follow. However, it tends to gloss over an often critical, yet uncomfortable, factor: luck.

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The Myth of the Self-Made Entrepreneur

The idea of the self-made entrepreneur is deeply ingrained in the cultural psyche, especially in places like Silicon Valley. The stories of entrepreneurs who "made it" usually emphasise their hard work, strategic vision, and leadership qualities. While these elements are undeniably important, the influence of luck is rarely given its due. This omission creates a skewed perception of what it takes to succeed in the startup world.

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Luck, in this context, can manifest in various ways: being in the right place at the right time, meeting the right people, or even launching a product at a time when the market is primed for it. The success of startups like Airbnb, Facebook, and Uber is often attributed to their founders' brilliance and drive. However, these companies also benefited from fortuitous circumstances. For instance, Airbnb launched during a financial crisis when people were looking for cheaper travel options, and Facebook emerged just as social media began to gain traction.

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Why Luck is Often Ignored

Narrative Simplicity: Success stories are easier to digest and more inspirational when they focus on the tangible aspects of hard work and strategy. Luck, being intangible and unpredictable, complicates these stories and makes them less actionable. It’s easier to inspire aspiring entrepreneurs with tales of perseverance than with the acknowledgement that some success is due to chance.

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Survivor ship Bias: The startup world is rife with survivor ship bias. We tend to hear only about the successful companies, not the countless others that failed despite their founders' hard work and talent. This bias reinforces the idea that success is primarily due to skill and effort, rather than acknowledging the role of luck.

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Psychological Comfort: Founders and investors alike may downplay luck because it challenges the belief that they are in control of their destinies. Admitting the role of luck can be unsettling, as it introduces an element of randomness into what is often seen as a meritocratic process.

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The Role of Luck in Fundraising

Fundraising is another area where luck plays a significant but often unacknowledged role. While having a strong pitch, a solid business model, and a capable team are crucial, many startups succeed in raising funds due to factors beyond their control.

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Timing: Market conditions can drastically influence the availability of venture capital. Startups that happened to be raising funds during bullish periods are often more successful, irrespective of their inherent strengths.

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Connections: Many entrepreneurs meet their key investors through serendipitous encounters or through networks they were fortunate enough to be part of. This is particularly true in ecosystems where warm introductions carry significant weight.

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Market Sentiment: The broader market sentiment toward certain industries can also impact fundraising success. Startups in "hot" sectors like AI, Fintech, or clean energy may find it easier to attract funding simply because these areas are currently fashionable among investors.

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The Consequences of Ignoring Luck

Ignoring the role of luck in startups and fundraising has several implications:

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Unrealistic Expectations: Aspiring entrepreneurs may develop unrealistic expectations about the likelihood of their success, leading to frustration and disillusionment when things don’t go as planned.

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Misplaced Blame: When startups fail, founders often blame themselves entirely, not recognising that factors outside their control may have played a significant role.

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Investor behaviour: Investors might also fall into the trap of overestimating their ability to pick winners, not realising that luck plays a substantial role in the success of their portfolio companies.

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Embracing the Role of Luck

Acknowledging luck doesn’t diminish the importance of hard work, strategy, and skill. Instead, it provides a more nuanced understanding of success and failure in the startup world. Recognising the role of luck can lead to:

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Better Risk Management: Founders who understand the role of luck may be more cautious in their decision-making, recognising that even well-thought-out plans can fail due to factors beyond their control.

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Resilience: When entrepreneurs understand that some failures are due to bad luck rather than personal shortcomings, they may be more resilient and more likely to try again.

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Informed Investment Decisions: Investors who appreciate the role of luck may diversify their portfolios more effectively and approach investments with a better understanding of the inherent risks.

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The entrepreneurial journey is often portrayed as a direct outcome of talent and hard work, with luck relegated to a footnote. However, luck plays a significant role in both building a startup and securing funding. By recognising and accepting the influence of luck, founders and investors can approach the challenges of entrepreneurship with greater realism, resilience, and wisdom. In the unpredictable world of startups, luck may not be something you can control, but acknowledging its presence can provide a more balanced and grounded approach to achieving success.

And of course we have bad luck hanging around the street corner waiting to sew chaos and confusion but that's a whole new posting for the future.