Skip to main content

Are you ready to get lucky?

Posting by Arun Natarajan in The Startup Journey web log.

I recently watched an interview with MphasiS-BFL's Chairman & CEO Jerry Rao television ( Udaya TV on February 20, 2004), when he said - quite firmly - that luck plays a huge role in any entrepreneur's success. He said a large part of his success was owed to the fact that he was "at the right place at the right time".

Rao gave examples to prove his point about luck being so important. For instance, his highly successful career with Citibank had begun "willy nilly" - via a campus placement at IIM-A. And even his founding of Mphasis Corporation, a California-based software company that subsequently merged with BFL Software to form Mphasis-BFL, was sparked off by a chance meeting with MphasiS' future co-founder during a flight trip.

Rao's remarkably candid and humble admission made me think about the role of luck in my own entrepreneurial endeavors as well as that of my friends. And sure enough, I could think of quite a few instances where sheer luck - good or bad - made all the difference.

Obviously we all know about the definition of luck as something that happens when "preparation meets opportunity". But is this always true? How about an entrepreneur whose idea was simply too early to market? What if the market that he was going after, blooms - to the benefit of his followers - two years after his start-up folds up?

As I was thinking more on these lines, as luck would have it (!), I ran across articles and interviews with other leading entrepreneurs which backed Rao's views on the Luck Factor.

Guy Kawasaki (the former Apple executive who founded investment bank Garage.com) says in his Forbes.com column that if he were to allocate weights to factors that contribute to entrepreneurial success, he would give 20% to experience, 10 % to classroom learning, 30% to hard work and 40% to luck. 40 per cent!

Seth Godin (who founded online entertainment and marketing company Yoyodyne and sold it to Yahoo!) actully wrote an article titled "The L Factor" in Fast Company magazine. "Friendster, the online social networking service, is the latest viral rage. It recently turned down a chance to be acquired by Google for $30 million. Just a few years ago, though, SixDegrees.com was offering almost precisely the same service, and it's no longer on the radar," he points out.

"Every time you launch a product or service .... you're either going to hit or not. If you get lucky, you're entitled to deny that luck had anything to do with it. But if you fail - and you probably will - understanding the role of the L factor will keep you sane. And if you've planned for it, it will keep you solvent as well. Solvent enough to try again and again, until you make it (and take all the credit)," Godin says.

Other entrepreneurs like Vani Kola, founder of software firms RightWorks (sold to ICG) and Nth Orbit, do not believe luck has any magical quality to it. It isn't something that will happen to you if you just sit back and relax. Or just another employee.

"Luck is the ability to recognize and take advantage of an opportunity.... It's being able to take the risk, and if you're wrong, you have to be able to change it," she said during a panel discussion at Silicon Valley's Churchill Club.

So, can entrepreneurs "plan" to get lucky?

Godin feels that the answer is to spread your bets. "Do that with lots of products, not just one or two. Cut your overhead so you have plenty of chips, ready for another spin of the roulette wheel," he advises.

Sergio Magistri of InVision Technologies (a company which makes explosive detection systems for airport security), another member of the Churchill Club panel, thinks having the "smartest possible team working together" is a good insurance against bad luck. When he was asked in an interview whether, after the September 11 attacks, his company felt like they had "won the lottery", Magistri replied saying "Yes, but you wouldn't believe how many tickets we bought." Yes, InVision was in exactly the right business post 9/11. But in preparation for it, the team had to make "investment in time, in people, in energy, in human work, in getting your people to work together the right way".

Amnon Landan, Chairman & CEO of enterprise software company Mercury Interactive and another member of the Churchill Club panel, provides a military analogy. "When they shoot at you, you can stay behind a rock and you'll be safe, or you can try and get to whomever is shooting at you. So you jump from one rock, to the other one, to the other one. You get exposed in the process, but in the end, you can actually point at who is shooting at you and take care of business. When you take this approach, you increase the risk but you increase the likelihood that you'll win," he said. "I think that's what entrepreneurs do - they take more risks so when they fail, they fail big. But they increase their likelihood that they'll be lucky".

So, the bottom line on the "L Factor" seems to be that if you have the other qualities required of a good enterpreneur (i.e. education, experience and hard work), there is a high probability that you will get lucky as well.

Arun Natarajan is Editor of TSJ Media. He can be reached at arun(at)tsjmedia.com

Popular posts from this blog

PE-VC investments in Q2'23 decline 33% to $9.9 Billion

Private Equity-Venture Capital (PE-VC) investments in India during the quarter ended June 2023 (Q2'23), at $9.85 Billion across 182 deals, registered a 33% decrease compared to the same period in 2022 (which saw $14.6 Billion being invested across 371 deals). The investment amount however rose 74% compared to the immediate previous quarter (which saw $5.7 Billion being invested across 181 deals), shows data from  Venture Intelligence , a research service focused on private company financials, transactions, and their valuations. The PE-VC investment figures for the first 6 months of 2023 - at $15.5 Billion (across 363 deals) - was 50% lower compared to the same period in 2022 (which saw $31 Billion being invested across 800 deals). Q2’23 witnessed 19 mega deals ($100 M+

Chiratae, Speciale and Stride Ventures win APEX'24 Venture Capital Awards

Chiratae Ventures, Speciale Invest and Stride Ventures were awarded as among the leading Venture Capital investors in India for 2023 as part of Venture Intelligence APEX‘24 Private Equity & Venture Capital awards event in Mumbai.  The Venture Intelligence “Awards for Private Equity Excellence” (APEX) is dedicated to celebrating the best that the Indian Private Equity & Venture Capital industry has to offer. The APEX Awardees are selected based on both Self Nomination by the participating PE-VC firms and "crowd sourced" voting from the Limited Partner, PE-VC and advisory communities. (The main criteria are Return Track Record, New Fund Raises & Follow-on Funding Rounds for Portfolio Companies) VC Investor of the Year Chiratae Ventures received the Venture Capital Investor of the Year 2023 Award on the back of 10 part exits totaling $178 million via Secondary Sales during the year. Its exits included those from retail unicorn Lenskart, SaaS Startup Pixis and baby pr

Blackstone, MO Alts and InvAscent win APEX'24 Private Equity Awards

Press Release Blackstone, MO Alternates (formerly Motilal Oswal PE) and InvAscent were awarded as among the leading Private Equity and Growth Capital investors in India for 2023 as part of Venture Intelligence APEX‘24 Private Equity & Venture Capital awards event in Mumbai.  The Venture Intelligence “Awards for Private Equity Excellence” (APEX) is dedicated to celebrating the best that the Indian Private Equity & Venture Capital industry has to offer. The APEX Awardees are selected based on both Self Nomination by the participating PE-VC firms and "crowd sourced" voting from the Limited Partner, PE-VC and advisory communities. (The main criteria are Return Track Record, New Fund Raises & Follow-on Funding Rounds for Portfolio Companies) PE Investor of the Year Blackstone received the Private Equity Investor of the Year 2023 Award on the back of strong complete exits during the year: from Sona Comstar and IBS Software. Ganesh Mani and Amit Dalmia, Senior Managing D

Avendus tops League Table for Transaction Advisors to PE deals in Q1'23

Aeka Advisors and Ambit claim the No.2 & 3 slot Avendus topped the Venture Intelligence League Table for Transaction Advisor to Private Equity Transactions for Q1 2023 advising 5 deals worth $808 million. Aeka Advisors stood second having advised 3 deals worth $228 million. Ambit followed with 4 deals worth $160 million. Ernst & Young ($114 million across 4 deals) and o3 Capital ($80 million across 2 deals) completed the top five for Q1 2023. Avendus acted as advisor to ADIA’s $500 million investment in omnichannel eyewear retailer Lenskart . Aeka Advisors acted as advisor to Kreditbee’s $160 million fundraise from Advent International, Mitsubishi UFJ Financial Group (MUFG) and existing investors. Ambit advised the $104 million fundraise of Freshtohome from Mount Judi Ventures, Iron Pillar, Amazon and others. The  Venture Intelligence League Tables , the first such initiative exclusively tracking transactions involving India-based companies, are based on the value of PE

PE-VC investments fall 38% in 2023 to below $30 B

The value of investments by Private Equity - Venture Capital (PE-VC) firms in India fell by 38% to less than $30 Billion in 2023. PE-VC firms invested $29.7 Billion (across 756 deals) in Indian companies in 2023, compared to $47.6 Billion (across 1,362 deals) in the previous year, reports Venture Intelligenc e, a research service focused on private company financials, transactions, and their valuations. (Note: These figures exclude PE investments in Real Estate).                                                                                                                                                                      2023 witnessed 67 mega deals ($100 M+ rounds) worth $21.2 Billion, compared to 112 such investments worth $31.8 Billion in 2022. The $2.4 Billion investment in Manipal Hospitals by Temasek (which gained majority control) and TPG Capital was the largest PE-VC investment in 2023. This was followed by the $1.35 Billion buyout of education loans focused HDFC Credila