Luck

A lot of people think that making money is about luck, but it doesn’t have to be. It can actually have more to do with becoming the kind of person that finds luck and makes money. You want to make money without having to rely on luck finding you, and to do this, you have to keep in mind the four kinds of luck. In his book Chase, Chance, and Creativity, neurologist and philosopher Dr. James Austin calls luck “chance” and defines it as: “something fortuitous that happens unpredictably without discernable human intention.” However, this doesn’t mean that luck is immune from human intervention. In fact, Austin goes on to define four different kinds of luck that differ in the way a person influences them.

The first kind of luck is completely accidental. It is pure blind luck that comes with no effort on our part. The second kind of luck is based on persistence or hard work. A certain level of action “stirs up the pot”, and brings in random ideas that will collide and stick together in fresh combinations that let luck operate. If you keep going, chances are you will stumble on something. As Charles Kettering said, “I have never heard of anyone stumbling on something sitting down.” This second kind of luck favors those who have a persistent curiosity about many things coupled with an energetic willingness to experiment and explore.

The third kind of luck comes to people who are good at finding luck—if you are skilled in a field, you will notice when a lucky break happens in that field that other people who aren’t as skilled just won’t notice. This is mostly just skill, knowledge, and work. Louis Pasteur characterized it when he said, “Chance favors the prepared mind.” The classic example of this third kind of luck occurred in 1928, when Sir Alexander Fleming discovered penicillin—one of the most important medical breakthroughs ever—by fusing at least five elements into a conceptually unified idea. He was working in his laboratory, made an observation, and his mental sequences then went something like this: a) I see that a mold has fallen by accident into my culture dish; b) the staphylococcal colonies residing near it failed to grow; c) therefore, the mold must have secreted something that killed the bacteria; d) this reminds me of a similar experience I had once before; e) maybe this new “something” from the mold could be used to kill staphylococci that cause human infections. In summary, this third kind of luck favors those who have a sufficient background of sound knowledge plus special abilities in observing, remembering, recalling, and quickly forming significant new associations.

The fourth kind of luck is the hardest kind and refers to luck that comes to people unsought because of who they are and how they behave. In other words, become so good that luck finds you. For example, let’s say you’re the best person in the world at deep-sea diving, and you’re known for taking on deep-sea dives that no one else will even attempt. Then, by sheer luck, somebody finds a sunken treasure ship off the coast that they can’t get at. Their luck just became your luck because they’re going to come to you to get that treasure. This is a bit of an extreme example, but if you’re a trusted, reliable long-term thinking dealmaker, other people will come find you just because of the reputation for integrity that you’ve built up. Warren Buffett is a good example of this. This fourth kind of luck favors those with distinctive, if not eccentric hobbies, personal lifestyle, and motor behaviors.

Dividing luck into these four categories of course leads to a number of challenges for how we live our lives as entrepreneurs and creators in any field. We thus want to be energetic. In a highly uncertain world, a bias to action is key to catalyzing success and luck, and it is often to be preferred to thinking things through more thoroughly. We want to optimize for the maximum number of “swings of the bat.” We also want to be curious. We want to be determined to learn about our chosen field, other fields, and the world around us. Curious people are more likely to already have in their heads the building blocks for crafting a solution for any particular problem they come across vs. the “more intelligent”, but less curious, person who is trying to get by on logic and pure intellectual effort. We also must become great at synthesizing and linking together multiple, disparate, and apparently unrelated experiences on the fly. In short, there is a roadmap to getting luck on our side.

mental models

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