The Skill of Being Lucky
As legend has it, The Devil appeared disguised as a traveler and asked to have a horseshoe replaced on his horse. The smith saw through the Devil’s disguise, nailing the horseshoe tightly to the Devil’s hoof instead and causing him great pain. The Devil agreed not to enter any building with a horseshoe mounted above the door in exchange for having the horseshoe removed from his foot.
I've been lucky for as long as I can remember. It drove my friends crazy.
With luck, I'm not talking about finding $20 bills on the street. Like everyone, I have my ups and downs. But in the end, everything seems to work out.
My 12-year-old self would be amazed. How did I get here? Does luck just fall into our lap? Or is there more going on than meets the eye?
How do we become more lucky?
Untangling Luck and Skill
For us, wins are skill, and losses are bad luck. For them, wins are good luck, and losses are a lack of skill. As they say, “success has many parents, but failure is an orphan.”
Where does skill end and luck begin? Like the yin and yang, I believe that luck contains skill, and skill contains luck. The post-hoc narratives of luck never tell the whole story.
It is lucky to experience favorable conditions. Cultivating those conditions is a skill.
It is lucky to have excellent timing. Recognizing and acting when the time is ripe is a skill.
It is lucky to be presented with opportunities. Making the most of those opportunities is a skill.
Skill is the difference between getting lucky and being lucky.
So, how do we understand what it means to be lucky? I find it useful to break fuzzy concepts like luck into component parts:
Total Luck = [Luck Frequency] X [Return on Luck]
Frequency is how often you are lucky and take advantage of it.
Return is the average magnitude of your outcomes when you get lucky.
This is a multiplicative model. You can multiply your luck by increasing frequency or average return.
Let’s examine these two components in turn.
Frequency: Getting Lucky More Often
When opportunity visits, they knock gently. Are you listening? Are you dressed?
If you want to be luckier, take more chances. Sizing up opportunities develops your palate, and pursuing them develops your instincts. When in doubt, expand your top of the funnel.
Position yourself in luck’s path by sniffing for serendipity. I love preaching the power of a consistent routine. (Focus on the bookends of your day!) But novel stimuli are catalysts for novel connections.
Scout intellectual and cultural frontiers. Host the party whenever possible. As you expand your network and range of encounters, you expand the set of parallel universes you have access to. More universes = more luck surface area.
Frequency is the realm of self-help aphorisms. Create your own luck. Chance favors the prepared mind. Optimize for maximum shots on goal. Bump up against reality. The greatest risk is doing nothing. Phrases become aphorisms by being obvious. The interesting question is, “If it’s so obvious, why aren’t you doing it?”
Maintain a balance of doing and telling. As Richard Hamming puts it, work with your door open:
"Those who work behind closed doors seem to work on slightly the wrong problems. Those who let their door stay open get less done but work on more relevant problems! I suspect an open mind leads to an open door, and an open door leads to an open mind; they reinforce each other."
~ Richard Hamming – You and Your Research
Luck has a mindset. You might call it “stop worrying so damn much all the time.” Anxious people fixate on threats. A scarcity mindset is a self-fulfilling prophecy. So relax! (Don’t try to relax; release the obstructions to relaxation.)
Act as if the universe conspires in your favor. Manifestation does not need to work to be useful—we see what we’re looking for. If you believe that luck is abundant, guess what you’ll see!
Return: Squeezing the Juice Out of Luck
When opportunity visits, they leave without warning. Are you committed to the bit?
Your return on luck is a function of speed and bet sizing. When luck strikes, move decisively and bet aggressively.
Moving Decisively
Being lucky is like becoming a master of time. The best move is often to do nothing and watch for a catalyst to shift the field of play. It's better to sit still on the starting line than sprint in the wrong direction. (Many will exhaust or disqualify themselves before the race even starts!)
Allow boredom. Protect your attention. Letting your mind wander is a modern-day luxury. Don’t rush to fill the open space. Our desire to be entertained is so strong that we let the fragments of others’ ideas crowd out our own.
Follow your curiosity into the arena. Be willing to experientially pursue interesting threads with no promise of gain. Savor the sensation of “I don’t get it.” This is what real learning feels like.
Say “yes…and” to life. Treat whatever crosses your path like an opportunity to explore and build upon. When I’m out of sync with reality, I reactively swat luck away like an annoying fly—not right now, not quite right. Waiting for opportunities to be fully derisked is a recipe for regret. Luck decays with time and shies away from crowds. You can have mediocre execution and still win... if you're early.
Size your bets proportional to your relative information advantage. Run small but meaningful experiments on anything with potential. Attention sharpens from the moment you have skin in the game.
You find fresh opportunities by getting your hands dirty, not by making beautiful mind maps on the sidelines. Reclaim your missing pockets of time with prospecting—keep exploring new places to dig until you strike gold. Then, dig deeper.
Double down on all successful experiments. As you receive positive feedback, you shift from firing bullets to cannonballs.
Betting Aggressively
Large returns require large stakes—you can’t win the farm if you aren’t willing to bet one.
Betting aggressively is about discrimination—being bold at the right moments. Develop and conserve your intensity so that you can unleash it when conditions are ripe.
Amateur poker players risk too many chips with mediocre odds and too few when the odds are amazing. I thought amateurs couldn't calculate the odds or didn't care to. Then, I decided they had scope insensitivity, focusing on the frequency of wins and losses instead of the relative magnitude. I believe now that people just want to be in the action. Being busy feels like making progress, no matter the result.
Having slack in your schedule is strategic, not lazy. Give yourself margin, so you have reserves to draw upon when the time comes. If your schedule lacks liquidity, rebalancing is doubly costly. You lose the initiative while creating space, and you’ll be myopically focused on immediate returns at the expense of long-term compounding.
When luck is on the horizon, enthusiastically commit. Run towards the fear. Dive in headfirst. Be tenacious, persistent, and relentless. Say yes with your whole body.
This is not the time for balance. What would it look like to go all-in? (If you were all-in, how would others know?)
Don't hold back. The tell-tale sign of holding back is justifying your efforts to others or, worse yet, to yourself. A high-conviction commitment needs no justification.
Seeking Alpha
What if luck was investable, like the stock market? How would you maximize your returns?
Do you subscribe to the efficient-luck-market hypothesis? Then dollar-cost average into the $LUCK ETF and call it a day.
Me? I believe that luck is unevenly but predictably distributed. Underappreciated sources of luck are all around me, awaiting discovery. When the odds are in my favor (it's a matter of time), I bet big.
It's nice to be lucky.