Hard work wins in business (a.k.a. it ain't just about luck)
anandsanwal.me
anandsanwal.me
I started a business a year before Covid hit. I worked hard and did multiple weeks of working 6 - 7 days. Then Covid popped up and my customer base slowly dried up due to people struggling to make ends meet. Working hard wouldn't have prevent Covid.
The two most important factors that determine whether a business will succeed are good decision-making and capital.
For example, if you'd had enough cash to finance three years of operating at a loss, your business probably could have survived Covid.
That's how many businesses survived Covid: they had a lot of cash in the bank, and they made the good decision of cutting costs to the bone until demand returned.
There are a hundred little decisions that need to be made wisely, and the businesses that fail are usually the ones that made the wrong choices. Anything that affects margins or your competitive advantage is a huge deal. Smart accounting is the backbone of any business that's built to last.
What type of business to start, of course, is one of those key decisions.
Hard work is remarkably ineffective at moving the needle once you scale up a bit. That doesn't mean you don't have to work hard, you still do, actually when you have something good going on, you tend to realize that you'd be an idiot to screw it up through laziness.
But you only have to hit about a dozen employees to be at the threshold where your personal time makes little difference beyond maybe a few key accounts or something. What will make the difference in the long run is the systems you put in place, which of course comes down to some very nuanced decision-making.
Luck, well of course it helps, until it doesn't, no one's lucky forever.
So I maintain that the name of the game is making consistently good decisions and having access to enough cash to weather any storm.
I would call that 99% luck, because I had done that before in multiple occasions but no one answered.
Doing something after failing multiple times can be hard work.
Hard Work + Market Analysis + (Massive Luck OR Large upfront funding OR Large and relevant network of personal connections) + Luck IRT externalities that can impact your business
I wasted my 20's because I didn't understand the formula above. I worked for a small startup and I thought the idea was great. I worked 80 hours a week and churned out massive improvements to the product as they pivoted over and over trying to find a foothold in the market. But now I realize that the failure was because of both a lack of market analysis and a failure in that third term: we had neither luck nor upfront funding nor a network of REAL connections that could make things happen for us. It was a recipe for disaster: for wasted effort and a wasted era of my life before I woke up and realized how unlikely it was that we would turn the ship around.
The unfortunate part is that the third factor - the Luck or funding or connections factor - is mostly only influenceable by how successful you already were before you started the venture. It is the "success begets more success" factor that is unpopular to talk about among people who want to believe that their success came exclusively from the sweat of their brow.
Most decision makers are fundamentally lazy. When they're choosing the person to promote to manager, the employee to hire, the startup company to invest in, or the restaurant to have lunch at, the decision methodology used is in no way optimal or hyper-rational. It's mostly just based what's familiar, nearby, and available.
And so realistically when great opportunities are available, the people getting them are not the best and brightest in the world, they're the best and brightest in the room – which often pale in comparison to the world at large. But they're good enough, familiar, and available, and so they are able to capitalize on those opportunities.
Thus the piece of advice is: find that room and get yourself inside, because the opportunity is not going to come looking for you.
Yes, it's humbleness to say that it's all luck, and I think it's egocentric to claim that you know how entrepreneurship work, once you succeed, let alone build frameworks/coaching programs around it.
However, based on my observation, as well as my experience, luck plays a major role in success in entrepreneurship/business/work. You could get lucky because your manager likes your personality, or you can be a hard-working asshole that no one loves and/or respects. The same goes to other aspects. You could get lucky because YouTube/Twitter decided to pick up your content and show it to millions of people, thus earning you customers/followers/brand.
I do think that the only formula for success is when preparation meets luck. As cliché as it sounds, if you put in the work, but get unlucky, you won't succeed. If luck finds you, but you have no product or your videos suck, you won't succeed. It's only when you work constantly, improve your craft, and continue to stay *active*, then, when luck finds you, you might succeed.
And this is what I am going to teach my kids, and this is the answer I'll provide to a random person on the streets.
Now our company is doing a few millions a year, highly profitable, no VC or external investment.
Was luck that I decided to try over and over? I might got lucky, but I persisted for so long while many others gave up. For me, making your own luck fits very well. Working hard gives you opportunities and you learn in the process so on next try, chances are better. Last projects got more and more profitable as I learned how to identify what people want.
I feel like we, humans, have some repulsion towards "getting lucky". It's seen as a discredit of our hard work, and yet, I think luck plays way bigger role. And it's spread across the board starting from the type of community you are born into, the education you get, the access to connection you and/or your family has, the money, etc.
It doesn't mean that it's only luck. As I said, you can get lucky a thousand time but if you didn't prepare for it, then it's not worth it. This is why consistency is important.
In less saturated markets being competent and working hard enough to sell might be enough.
However, this skill cannot be taught, cannot be honed, etc.
What can be taught or practiced, at least partially, is the ability to be prepared for serendipity.
You're absolutely right though, and plenty of people fail for many reasons including bad luck or for reasons they had no control over. As a society, we need to make sure that folks who do take a a chance but fail aren't left to rot and still are able to put food on the table and take care of their families.
I am a great believer in luck. The harder I work, the more of it I seem to have. -Coleman Cox
“If you trust in yourself. . .and believe in your dreams. . .and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and weren't so lazy.” ― Terry Pratchett, The Wee Free Men
Hard work lets you capitalize on small opportunities. Without it you'd need a 3-sigma occurrence to benefit. Of course, those are the types you hear about, because they make great stories.
You've got a set of cards, some of them can be really good, some really bad. This can the country you were born, family financial power, genes, etc
If you have great cards and play poorly, you can still lose pretty badly. If you have bad cards initially and know how to take advantage of opportunities (new cards that are dealt), you can win.
Hard work is improving your chances for success, you'll unlock more opportunities and it's up to you how you handle them.
There is all sorts of business luck that occurs. As one example, in a startup you get some early customers in a vertical and the government changes the rules to make you're tech necessary for the vertical. And then no one else recognizes or competes with you on that vertical for awhile. So there is a giant don't f it up component as another comment pointed to, but you also don't get run out of business by a slightly better execution from a bunch of competitors.
says every 'successful' business person, company owner, shareholder, etc.
No doubt hard work is a major, or even necessary, factor; when you work hard, you create a much larger surface area for luck, and also capitalize on whatever luck does hit you.
But let's not pretend.
Many people work hard, much harder than many entrepreneurs, and still barely scrape by. There was an article here about UBI that mentioned someone working as a cook (notoriously hard work and long hours), but who was living in his car in the parking lot, unable to afford rent. What kind of system is that?
Also there's rather more motivation to work hard when you're effectively getting $1000's per hour as a company owner vs $2.75 or whatever minimum wage works out as, factoring in benefit cuts as a result of employment.
And BTW I don't think it's only 'pure' luck as most people conceive - it's about stumbling on those gaps and loopholes in the system, or that your father happens to know a guy researching an algorithm that would give your SaaS a winning edge, etc, etc, so a good part of 'luck' boils down to socioeconomic privilege.
A lot of "success" we see today is coming at the cost of wasting someone elses time and energy. And the more we celebrate it the more mindless harworkers think they are on the right path.
Hard work works especially for those at the bottom. And if you're located in the USA and you have that perspective, then you are not well traveled or have never lived in a third world country. I have.
Hard work may be a necessary condition. But it isn't sufficient.
Many such people who are entrepreneurs etc. right now would be in the service industry if not for their luck. That’s the only difference between most people, simply luck. That said, I have such admiration and respect for those who truly overcome odds to slowly or otherwise make it despite their bad luck. It’s hard to stop lying to each other about ideals of meritocracy or whatever because everyone has a self image and narrative they prefer about themselves or society. But do you really think that someone else who had your life wouldn’t have done the same as or better than you? Why do you think they’d be worse if you do? Cognitive biases are tricky, I wish people would stop lying to each other and themselves as that might perhaps make for a social environment which is optimal for most people’s self determination
So yeah, it's both, but I don't think anyone becomes a billionaire without luck.
hard work will typically at least lead to a good outcome, but often not a great outcome, so it's still a good idea, but of course hard working people are often taken advantage of by sociopaths
see: https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...
as we in the west have burned through our cultural infrastructure of reciprocity and solidarity, appeals to "hard work" are going to ring increasingly hollow to young people priced out of the life their parents had, i don't blame my young students for their cynicism