Here's the rub: will the rocket ship ride be successful or will it blow up? It's easy when you have made it to look back and give advice. Remember Tevye from Fiddler on the Roof when he sang "If I were a rich man..........." People would fawn on you because you made it and listen to your advice but that advice may or may not be useful.
Let me change course for a minute. How many of you get emails hawking a system in stock trading that says you can make $1million with an investment of only $10,000? I get those emails all the time and sometimes I am curious enough to find out how. It’s usually based on highly leveraged trades using options or other derivatives and the deals are truly based on luck. I will give you an example that has the good and the bad of both. If you would have invested $8,000 in Ethereum (ETC), a cryptocurrency, in Dec. 2016, and you sold only 7 months later you would have made $380,000!!
Investing $8,000 is a lot for many people and the potential for loss in the stock market is fairly high. Risking $1 or even $100 on a high potential return is less risky and most people can afford to lose a small amount of money to win something very large. Playing with your career, however, is a high risk venture so you have to be somewhat cautious and take calculated risks. Additionally, as business people you may be faced with several different projects or opportunities that you can jump on (the rocket ships) and the question remains: “how do you select the right opportunity?” So, the question exists whether you are playing the stock market, the lottery, being an angel investor or Venture Capitalist, or just a good business person. The answer is not simple yet those successful in finding that rocket ship have a system they follow – or they are just plain lucky.
A system is a set of rules and methodologies that are used to select options from a set of opportunities. And, moreover, it is a set of principles to follow that tell you when to exit and while you are in the opportunity, how to manage the opportunity to achieve the best success. Whether it is the stock market, your business career, or the leader of projects the same general principles will apply. Jack Schwager wrote a series of books called The Market Wizards (click the link for Schwager’s Amazon site). In short he discovered that each successful investor had different systems but the one thing that stood out is the discipline each investor had at implementing their system AND each investor had some unique skill or advantage that he/she put to use, e.g. great analytical mind, attention to detail, or understanding of a specific market.
Creating a 6-step system for luck
There is no magical system that can be implemented that creates luck. There is no service to which you can subscribe. Yet, there are some steps you can take that will improve your chances of success and make you lucky. As Thomas Jefferson said: “I am a great believer in luck. The harder I work, the more I have of it. Here are 6 steps you can take to work not only harder but also smarter.
1. Get organized. Create a journal of ideas and catalog them. Have a special book with tabs for these ideas. I set up a journal using Staples ARC system and have tabs on new ideas, new blogs, interesting articles and I review them regularly.
2. Live your passion. This sounds so simple but from the perspective of building luck, living means getting out and networking and attending events with others who share your passion. I believe luck is improved when you focus on your passion. If you are a technologist live in that environment by attending events at schools, through meetups and other in-person activities. Relationships with others can lead to luck. Think about people at Harvard who met Bill Gates or Mark Zukerberg and had the opportunity to know them and eventually work for them. Attend TED events for new ideas. I am interested in AI and deep learning so I pay attention to meetings that talk about these technologies. I have become active with a group at CHOC hospital called MI3 (Medical Information and Intelligence Institute) run by Dr. Anthony Chang and whose focus is on applying AI to health care. Companies that present there and discussions on topics may give me ideas that I can enter into my journal.
3. Improve your learning. With the Internet it is easy to learn. You can sign up through Coursera or the Kahn Academy or through colleges who offer educational information. It’s also easy to sign up for Google Alerts for things that are important to you. I also read Investor Business Daily, not only for stock information but also the sections on New Technology and New America. But don’t stop there; you can set up your reader on the internet to send you articles on topics of interest. My home page on Yahoo is set up with RSS feeds on subjects of interest.
4. Evaluate ideas and perform due diligence. There will never be a dearth of ideas. The issue is evaluating these ideas based on attributes that are important to you. Consider risk vs. reward. If it is a new company you are evaluating (the rocket ship) look at the competition and the management team. In angel investing we pay more attention to the management team than any other factor. Do some market research, preferably first hand research. I recall a postal worker who delivered the mail years ago and he saw something very interesting. People were having red disks delivered to their homes. The company was Netflix and he invested early. In June 2002 the price was under $1 per share; now it is nearly $200. It is not as rapid a growth as Ethereum but it has been and probably will be a good ride. Another way to research something is to walk around the malls, especially for consumer goods. See where people, especially young people, are buying and what they are wearing.
5. Act quickly. You don’t want to be rash but when opportunity knocks you have to act quickly. At this point you will have had collected ideas, learned about new things and probably evaluated ideas. When the idea is presented or the opportunity materializes you might have already analyzed it. Then make a decision and move on. As they say, success is never final; failure is never fatal. This brings us to the last point.
6. Develop a contingency plan. Uncertainty exists and sometimes events beyond your control can put a damper on the best plans. Therefore, it is always good to reevaluate your plans and opportunities on a regular basis, e.g. every 6 months but certainly not longer than a year.
The system is important and if you have a good system positive outcomes will accrue in time. If you are not getting positive outcomes either your system is not good or your “edge” is not as great as you thought. Here are some considerations for you.
Early failure is not the end of the world. You have to get comfortable in your system and potentially tweak it. The key is the ability to fail fast and learn from your mistakes.
Flexibility. I have written in the past that a great business executive has to be “fast, fluid, and flexible.” This is certainly true for those in business and in improving their luck at getting on the right rocket ship.
The method used to improve luck and success has to be right for you. Just as Schwager showed for great investors, their systems matched their personalities. You have to find a system that works for your temperament and your level of risk.
Being lucky is not easy but luck increases with more opportunities and learning. You can make your own luck by hard work and learning from your mistakes. The key factor though may be how you personally deal with setbacks and success. It is said you learn more from setbacks and as I look at my own career, I can certainly resonate with that point.
There is no perfect system that can be implemented to improve your luck. And frankly, I believe some people are luckier than others. An actor that is “discovered” by a movie executive is one example. For others, especially in the business world seeking success or fame and fortune, it is more likely a combination of keeping your eyes open, actively seeking out opportunities, and a balance of IQ (innate intelligence) plus EQ (emotional intelligence and resilience) plus BQ (business sense which can be learned).
And maybe one day, for those readers of this blog who become successful, I will see you on the cover of Forbes magazine.
About the author David Friedman
This article was originally published on Clevel Partners and is reprinted here with the kind permission of the author David Friedman.
David Friedman is a tech-savvy marketing and operations executive with more than 30 years’ expertise in bringing to market new technology. He plays at the intersection of technology and the customer; his real love is innovation and commercializing technology to meet the needs of customers. A member of the TechCoastAngels of Orange County since 2009, he serves as head of the screening committee and serves as advisor to several startups in the consumer and enterprise software markets. His specialties include:
ideation and feasibility analysis
building partnership ecosystems
developing risk management mitigation strategies
strategic management and planning.
During his career he has introduced more than $1.5 billion in new products. David has been executive vice president and Chief Marketing Officer for ATX Group (now Sirius Connected Car) which provides telematics and information services to automobile manufacturers. Previously, he was Vice President, Marketing and Direct Sales at Connexion by Boeing, and commercialized the first in-flight Wi-Fi services for passengers on commercial airplanes.
Friedman holds an MBA (economics) from George Washington University, a master's degree in electrical engineering from Columbia University, and a bachelor's degree in electrical engineering (summa cum laude) from City College of New York. He recently published a book called StreetSavvy℠ Business: A Way to Prevent Corporate Mediocrity which is available on Amazon and Lulu Press.