On luck, risk and the randomness of life.
Or what to do when you’re being unlucky.
Bill Gates attended Lakeside High School when he was 13, a private day school located on the shores of Lake Washington and the only institution he graduated from — yikes.
Lakeside was one of the only high schools in the world that had a computer. Most university grad schools did not have a computer anywhere near as advanced as Bill Gates had access to in eighth grade.
‘The experience and insight Paul Allen and I gained here gave us the confidence to start a company based on this wild idea that nobody else agreed with — that computer chips were going to become so powerful, that computers and software would become a tool that would be on every desk and in every home,’ he told the school’s graduating class in 2005.
‘If there had been no Lakeside, there would have been no Microsoft,’ he admitted.
The way our lives turn out is the result of two things: the influence of skill and the influence of luck. Invariably, this means it’s possible to make the right decision and get a negative outcome or you might wing a situation, get lucky, and have a stellar result.
Put simply, as Annie Duke described in her book, Thinking In Bets:
Outcomes are rarely all skill or all luck. Even when we make the most egregious mistakes and get appropriately negative outcomes, luck plays a role. For every drunk driver who swerves into a ditch and flips his car, there are several who swerve harmlessly across multilane highways. It might feel like the drunk driver in the ditch deserved that outcome, but the luck of the road conditions and the presence or absence of other drivers also played a role. When we do everything right, like drive through a green light perfectly sober and live to tell the tale, there is also an element of luck. No one else simultaneously ran a red light and hit us. There wasn’t a patch of ice on the road to make us lose control of our vehicle. We didn’t run over a piece of debris and blow a tire.
Or like Morgan Housel wrote in my all-time favourite book, The Psychology of Money,
Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. They are so similar that you can’t believe in one without equally respecting the other. They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes. They are driven by the same thing: You are one person in a game with seven billion other people and infinite moving parts. The accidental impact of actions outside of your control can be more consequential than the ones you consciously take. [emphasis mine]
This is why rejected applications don’t necessarily mean you’re not good enough, sometimes you’re just on the other side of luck.
It’s the same reason VCs expect about half of their investments will fail — not because they will invest in ‘bad’ startups.
‘I’ve made billions of dollars of failures at amazon.com’, Bezos remarked in an interview. ‘‘A few big successes compensate for dozens and dozens of things that didn’t work’’
In fact, if you’re applying to top schools, trying to get into very competitive firms, or raising money for a startup: You should expect to get some rejections. It’s just the way life works.
I’ve gotten so many opportunities because I was skilled — and equally lucky.
And trust me, I’ve experienced my fair share of the other side of the coin.
I remember securing an internship position with one of the Big 4 accounting firms during my undergraduate days after series of tests and interviews. I was elated, to say the least—until I realized I won’t be joining the firm. They had this strict rule that the internship had to be a minimum of six weeks and must be concluded in summer (September). That meant the starting time couldn’t be later than mid-August. Well, school exams were delayed than expected and the earliest I could resume was August 27th. They weren’t willing to bend the rules and I had to forego the internship.
Realizing that both luck and risk are an ever-present and normal part of the game makes you accept that not everything is in your control, which is the only way to identify and focus on whatever is in your control.
When you’re skilled and it seems you’re being unlucky: it’s only a matter of time. The best bet is to continue to focus on that which you can control (skill). Before long — as I’ve seen multiple times — luck would have no option but to cooperate with you.
In fact, the higher you move up on the skill (or merit) scale, the better you can leverage luck to your advantage. While Lakeside was an enabling environment for Gates, he still had to work his ass off to build Microsoft into one of the world’s most valuable companies.
Ultimately, I believe in Paulo Coelho’s popular quote in The Alchemist:
