I recently had an emotions & finance chat with an entrepreneur—let’s call him Justin—who worked in an entry-level role at a large national retailer, something like Wal-Mart, early in his career. The main thing that stood out to me about Justin’s story was how consistently he took advantage of every opportunity offered to him in every position he held. Some of those opportunities led to rapid advancements in his career, in unpredictable and seemingly random ways. A casual observer would call this luck.

I don’t think Justin had more “good luck” than an average person. What was different about Justin was the mindset he adopted in creating his luck out of thin air.

This note discusses the mindset of creating luck, and the emotional blocks that people face when attempting to adopt this mindset.

What is Luck?

There are two main mindsets that people have when it comes to luck: the first, that luck is something you create, and the second, that luck is something that happens to you. (Next week, I’ll discuss the mindset of luck happening to you.)

I subscribe to the first view. I have always liked this definition of luck, generally attributed to the Stoic philosopher Seneca[1]:

Luck = Preparation + Opportunity

Luck can be created because both inputs to the equation—preparation and opportunity—are under our control. Preparation is obvious, which I’ll discuss briefly, but controlling opportunity is also possible and not as obvious.

Preparation

The value of preparation should be self-evident, but I’ll make a couple of points about it anyway.

1)      Preparation is a form of practice, and practice makes perfect people better at things over time. Preparing or rehearsing a speech, a yoga class you’re leading, a sales or fundraising pitch, whatever, will lead to a better result than if you were making it up as you went along. Do this hundreds or thousands of times, and it will become second nature. People will say, “you’re a natural.”

2)      The less obvious benefit of preparation is that it trains your mind to see opportunities. If you spend time and mental energy preparing and refining your consulting offer, you start to prime your mind to see places where your consulting offer could add value. Essentially, I see this as keeping whatever you are thinking about regularly on the front burner. It’s always top of mind for you which means that in any interaction, you’re drawing connections between whatever is being discussed and the item that you’ve been preparing.

Opportunity

How much we prepare is obviously under our control. I posit that generating opportunities is also under our control, by taking actions.

My analogy: our actions are like catalysts in chemistry. When a catalyst is added to an inert substance, or a substance in which a chemical reaction is already underway, the catalyst either sparks a chemical reaction (in the former case) or accelerates the reaction that is already underway. Said differently, the catalyst makes something happen that otherwise wouldn’t have happened.

Every time we take an action, we act as a catalyst in the world. We can’t predict what the reaction will be but we will generate some kind of reaction. Consider actions like attending a networking event, making a sales pitch, extending a consulting offer, applying for a job, sending an old professional contact an email, or anything like that. We may have a goal behind the action, but the outcome is essentially random. Most of the time, the reaction will be a “no” or a “zero” but not always. Occasionally, we’ll generate a positive reaction, and the reaction may not be what we expected or wanted, but is still something good. The old professional contact most likely won’t move the needle on anything we’re working on but there’s a small chance that they may have a mutually beneficial introduction to make. If that introduction leads to a lucrative contract, job offer, or a significant investment, that was not random luck. That was generated luck.

I’ll give a concrete example. I’m teaching undergraduate finance at UT-Austin next semester. Another new adjunct professor invited me to coffee, just to get to know each other with no other objective. During that two-hour conversation, he mentioned an Austin-area investment/entrepreneurial community that I had not heard of. If I go to this community, meet an investor in a publishing company, describe the emotions & finance project I’ve been working on and the hundreds of conversations I’ve had on the subject, and then get invited to discuss a book deal—whether I was looking for one or not—is that luck? Or is that preparation meeting opportunity, both of which were deliberately generated?

There are Many Avenues for Opportunity Generation That are Not Obvious

Attending a bunch of networking events, making lots of sales calls, sending out tons of resumes, all of that stuff is obvious. It’s a numbers game. The expected outcome of any spin of the roulette wheel is low, but you can choose how many times to spin the wheel.

However, there are better games to play than roulette. These opportunity-generation avenues are less obvious, and are more effective because they often have a personal dimension to them and are unusual. I like to think of them as “low-cost, high-upside” actions. In Justin’s case, the opportunity he took advantage of was his access to the Wal-Mart competitor’s entire corporate contact directory, because he was also an employee. He used that to send a bunch of cold emails to executives, asking for someone to mentor him. Corporate executives rarely get cold emails from 18-year-old greeter employees asking to be mentored in business. Really low-cost, and potentially extremely high upside, very personal, and very unusual. Most of them didn’t respond, but a few did, and a couple became long-term professional contacts.

Justin had no specific objective beyond finding a mentor. But he put himself into situations that had numerous avenues for “random” positive outcomes, many of which he would be unable to predict ex-ante.

When we put ourselves into situations with high upside potential, we can’t predict exactly what will happen. There’s just a solid chance that it will be something good.

What Stops People From Taking More Spins?

There are two emotions that I see at work here: fear and disappointment (sadness).

1)      Fear

Fear is omnipresent. It’s always there. When it comes to opportunity generation, it’s the fear of rejection—the customer will say no, the company won’t get back to you about your job application, etc. With networking there’s also social anxiety and the entirely normal fear of strangers and the unknown. The fear of the unknown extends to doing the “unusual and personal” actions that can lead to very high-upside results, like reaching out to a colleague for a casual coffee, cold emailing the executive whose contact you found in the database, etc.

The good thing about fear is that once we take the action that we’re scared of a few times and don’t die (literally), our nervous system learns that the action is not fatal or dangerous and we needn’t fear it. The fear goes away on its own. I have emailed enough colleagues asking for a coffee that I’m no longer scared of it, and moreover, I’m not affected by even a straight no…

2)      Disappointment

…but when we’re starting, the “no’s” hurt quite a bit. In an emotions & finance conversation I had today, a man described the emotion he was feeling after sending out 200 job applications and receiving one interview as “despair.”

Trying something and not getting a good outcome, and then trying again and not getting a good outcome, and repeating that dozens or hundreds of times more, absolutely sucks. There’s no sugarcoating it. It sucks.

It’s hard to muster the energy to keep going after countless disappointments. Rather than telling you to persevere and keep going, I’ll only acknowledge that “keep going” is hard, and that feeling dejected is normal. Start there. Let yourself fully feel the despair and sense of hopelessness. Coping with disappointment is a skill that you will master with practice.

The good news is that eventually you’ll get tired of moping around and feeling sorry for yourself and you’ll start to get angry, and then you’ll blast out 50 more emails.

Exercise

Journal on the following or discuss with a friend.

1)      Inquiry

What belief do I have about the nature of luck? Am I at the mercy of forces outside of my control, or do I have the power to influence what happens to me by preparing and seizing the opportunities that do present themselves?

2)      Preparation

Regardless of what belief you hold about luck, consider the following:

If I believed that preparation was valuable, in what area of my work or career could I benefit from preparing more?

Notice any resistance you may feel at the idea of preparing more. Preparation is work; it isn’t necessarily fun.

3)      Action

If I believed that it was possible to generate opportunities to display my preparation, what might those opportunities be? What’s a network, contact, or venue I already have access to that I am not utilizing fully?

The exercise here is half-emotional, and half creative thinking. It’s not to send out 20 more cold emails. Justin realized he had access to a database of contacts, a “perk” he was entitled to as part of a job he was already doing. What do you have access to that you aren’t tapping into?

If you aren’t sure, let fear be your guidepost. What’s something that in the back of your mind, you know you ought to be doing, but have been avoiding?

After you take the action… you will probably not get what you want on the first, second, or twentieth try! Expect and embrace the disappointment. But what does it really cost you? If you took 1000 spins of the wheel, would you win at least once? Remember, we are talking about real-world luck—unlike casino games of chance, you don’t know what the size of the prize is before you play. It can be much bigger than you believe is possible!

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[1] https://en.wikisource.org/wiki/On_Benefits/Book_VII: "The best wrestler," he would say, "is not he who has learned thoroughly all the tricks and twists of the art, which are seldom met with in actual wrestling, but he who has well and carefully trained himself in one or two of them, and watches keenly for an opportunity of practising them.”