Issue #15 Is it Better to Be Lucky or To Be Good?

In the 1980’s as the internet was starting to take form, the Internet Assigned Numbers Authority (IANA) started assigning two-letter domains to nations and territories around the world.  They decided to use 2 alpha characters as part of the internet geography, with many nationally domiciled enterprises within countries using  domains ending with ‘.uk’ for the United Kingdom, ‘.fr’ for France, ‘.au’ for Australia, ‘.ca’ for Canada, and so on. 

In the mid 90’s a small British island  in the Caribbean called Anguilla, selected ‘.ai’ as  its territorial domain.  This was at a time when the internet was still nascent, without seeing the development  of much of the web architecture, let alone imagining the gold rush that would ensue 25 years later, with the  dawn of artificial intelligence. 

In 2018, it is reported that Anguilla earned $3M US from the influx of registrations wanting to use the .ai domain.  That has accelerated dramatically in the past 2 years from new domain sales and existing renewals at a higher price, and in the year ahead Anguilla expects to generate  $6M US per month, (1/3rd of the island's GDP!). 

Was this luck or was it as a result of good planning and execution?  The answer is that it was to be a bit of both.  Anguilla had to take the initiative to apply for its own territorial domain and have the foresight  of the future potential value, by turning down an offer from a Taiwanese company who tried to acquire the domain. However the a-symmetrical outsized return that Anguilla is enjoying today can only be attributed to a confluence of trends outside of the control of the island’s leadership.  This is a type of luck we refer  to as ‘dumb luck’; being in the right place at the right time but still making a decision in order to take advantage of the luck that comes your way.

The best definition of luck is timing.  In a business context, this looks like the right idea at the right time combined with entrepreneurial foresight and then disciplined execution to leverage the opportunity.

The right idea at the wrong time is still the wrong idea.  Just ask the Apple team who attempted to launch the Newton.  The Newton MessagePad was launched in 1993, and was one of the first attempts to create a personal digital assistant (PDA).  When the device launched, the technology was not fully mature, and this led to mixed reviews and poor public perception regarding the product's  functionality.  The technology driving the Newton was still too primitive, the market was not yet ready and as a result the Newton struggled to find its footing and was subsequently discontinued in 1998. 

Apple could have chalked it up to a bad idea with limited market opportunity, choosing to abandon the category all together. However the early launch was full of learning and helped lay the groundwork for what would emerge from the future.  When Steve Jobs returned to Apple and saw the converging trends, he took advantage of the timing to use the prior experience to help develop and then launch the iPhone - a foundational move that would in turn make Apple one of the  most valuable companies in the world. 

Jobs was a visionary who not only imagined a different future but was also a maestro in sequencing the right moves at the right time. He was known for being very demanding and overly protective of the Apple ecosystem but his real genius was his almost sixth sense for timing product launches.  This is referred to as ‘see luck,’; the ability to identify changes in a market and then position their companies' moves to be ahead of the change, and then ride the wave of demand that is building.  

The truth is that in order to be lucky you first have to be prepared to seize the opportunity and take advantage of it when the moment arrives. This means that to become the beneficiary  of a lucky break, you need to have  done the necessary prep work and then be smart enough to mobilize resources when the timing is in your favor. 

Consider Tom Brady who was drafted in the 6th round as the 199th overall pick by the New England Patriots during the 2000 NFL Draft.  He was selected as a fourth-string quarterback and it seemed unlikely that in his position that he would be given an opportunity to step into a game.  This was exacerbated by the fact that just after his arrival, the Patriots signed a $100M contract with their starting quarterback Drew Bledsoe.  It is reported that none of these factors deterred Brady who remained  hopeful of his future prospects, working incredibly hard and being both supportive and inquisitive of Bledsoe. He is quoted as saying that what he lacked in talent, he made up for in training and he was regarded as one of the hardest working players during team practices. In time his preparation paid off. He moved from fourth-string to Super Bowl champ (aided by some luck), and went on to not only create an NFL Dynasty but become widely considered as the G.O.A.T.

Tom Brady had grit luck.  In the beginning it did not come easy for him and there were several circumstances that could have easily deterred him.  However he was gritty and doubled down on doing the work to make up for what he supposedly lacked in talent; preparing  himself to be ready to seize the opportunity when a lucky opportunity came his way. 

What are the lessons to be learned here? We need to improve our ability to become more aware of the role luck plays.  We need to grow our resilience, resisting the urge to quit too early and instead push through the pain to find new possibilities on the other side.  We need to use our experience and connections to become  more intuitive, learning to identify emerging trends and then position our business  to benefit. 

To that end here are some questions to consider:

1. What opportunity/idea/venture did I quit too soon on and why? 

2. Do I consistently show up and do the work that will have me positioned to take action when the right timing presents itself?

3. Am I adopting a ‘goals in concrete; plans in sand’ approach for my business, by taking the time to reflect on my experiences, extrapolating learnings from them to then adapting my business plan to the changing market conditions?

4. Am I using my resources including: company data, 3rd party analysts, a trusted peer network or any other source that provides insights on emerging trends? 

5. Am I simply entertained by the information or am I acting on these insights?

6. Am I being consistent in saying what I will do and then doing what I say that is resulting in building credibility that will in turn attract new well timed opportunities?

This last question should make you stop and consider its application in your life. It is when you become so good at what you do that the world beats a path to your door wanting you to become involved in opportunities because of your proven experience and connections.  It is moments like that when you will need to enlist your fortitude, discipline and wisdom as many distractions come disguised as opportunities. (We will explore that idea more in a future letter)

Our hope from this letter is that you come to recognize that the success of any enterprise depends largely on three things: how hard you and your team work, the smart strategic decisions you choose to make but most importantly getting the timing right.  All are required as a part of the success formula but the latter will have the greatest impact on the outcome. 

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