Episode 21.  Luck and Preparation

I have noticed that most people when they meet or hear about someone who has been highly successful think to themselves, “Wow, how lucky he (or she) must have been to be where they are.”The reality is that, although there is an element of luck in every success, there are many people who somehow manage to be “lucky” a lot more than most of the rest of us.  There is a reason for that and it is summed up in this frequently quoted statement: Let’s talk about good luck first.  When we exclude such things a winning a lottery or inheriting a fortune from a long-lost relative, almost all luck is a matter of recognizing and acting on something that others do not see as an opportunity.A dear friend recently told me the story of her parents. They were immigrants who lived in a Midwestern city, had worked hard all their lives, and lived a prosperous middle class life.  But they had not reached financial freedom because they still needed to work every day to keep the revenue coming in.  One day, my friend recalls, they commented over dinner how cheap land was in the United States where one could buy land around the city they lived in for $100 per acre.  Although they were not rich, they could easily have bought quite a few acres of that land that would, in time have made them wealthy and secured their children’s future.  Instead, they just noticed it, but did nothing.  In their case, that failure to act was primarily a function of the culture from which they came in which such investments were not common because ownership of property was not protected well by the law—one of the great benefits of living in the United States.  But how many native born Americans read the same newspaper article, but failed to take the action that would, today, have made them wealthy and financially secure. But they did nothing.Why not?  I submit to you that the reason was a function of two things:Failing to prepare their minds to look around them on a daily basis for opportunities that others were simply not seeing or were ignoring; andA fear of taking a risk that might lead to a loss instead of a profit.We’ll talk about fear of risk shortly, but let me give you another example of the difference between looking at the world with entrepreneurial eyes or failing to do so. I read recently about an entrepreneur who made his first fortune many years ago when about 25% of the paper currency in the United States was backed by silver.  Recognizing that silver was also used in industry and might in the future be worth more than the currency, he began buying paper currency that was convertible into silver and, when silver prices grew beyond the value of the currency, he converted the currency to silver and, I am told, ended up making over $100 million dollars.  Why didn’t everyone else do the same?  It was printed right on the currency, “Silver payable to the bearer on demand.”  He saw that as an opportunity.  Most of the rest of us just noticed it and did nothing.  I was one of those who did nothing and had to make my fortune another way.  Buy why? I, like so many others, had not yet developed the habit of looking at the everyday world around me as the candy store of opportunities I now know that it is.  None of us will recognize all the opportunities, but failing to prepare our minds to see those opportunities is preparing to fail.However, I later did notice that there was a lot of interest in using some things called “stem cells” as a potential way to treat diabetes.  This time, I recognized the importance of what I was hearing and remembered that I know a scientist who was one of the leading cell biologists in the world and was looking for a new job or project.  A few years later I was CEO of a public biotech company worth over $100 million dollars.  Not all of that was mine.  We had many investors, but it started because my partner and I saw something most everyone else was ignoring and took some risk to test our theory. It all starts with preparation of the mind to see opportunity where others see either nothing unusual or see problems instead of opportunities.