The 3 Types of Luck — What 10x Winners Do Differently

0:00 Well, we need to systematically understand this and and Morton really gets a lot

0:03 of credit for for this because we we figured out how to do it.

0:07 You have to first of all define what luck is.

0:09 If you're going to study luck, you have to understand what it is and realize

0:12 that luck is not an aura or something.

0:14 It's an event.

0:14 It's a luck event.

0:16 And and if we could put the parameters of what

0:18 is a luck event and what with Morton's collaborating together,

0:23 we defined a luck event and I think this is

0:24 a really good definition is a you didn't cause it.

0:28 So if somebody says you make your own luck, it's not luck by definition, right?

0:33 Because there's bad luck too.

0:34 If I get a cancer diagnosis and we say I make my own luck,

0:38 no, you didn't cause it.

0:40 The second is it has a potentially significant consequence, good or bad.

0:44 And the third is in some way it came as a surprise.

0:48 You you didn't know that it would happen or when

0:51 it would happen or what form it would take, right?

0:54 But there it is.

0:56 And any event that meets those three tests is a luck event.

1:01 And once you have that lens,

1:04 you didn't cause a potential significant consequence,

1:06 some element, some significant way, it's a surprise.

1:09 You begin to see their luck events happening all the time.

1:12 And and so then what Morton and I did

1:16 was we looked at these companies and we said, "Well,

1:19 now let's actually run the numbers and see because we always had comparatives

1:23 in that study." And we were able to demonstrate that the big winners,

1:28 the ones who had the huge outsized returns relative to their direct comparisons,

1:32 did not get more good luck.

1:34 They did not get less bad luck.

1:36 They did not get bigger spikes of luck.

1:37 And they didn't get better timing of luck.

1:40 So luck as a distributed variable was pretty even between

1:44 those that were the huge 10x winners and their direct comparisons.

1:48 So clearly luck didn't separate.

1:50 And then that led to the observation that but it was

1:54 the return on luck that when the luck came they had this amazing

2:00 ability relative to the comparison to make more of the luck

2:03 and that led to the return on luck as the critical variable.

2:07 So now we come to this study and I I was looking through you know just looking

2:11 at the amount of luck that's in these people's lives

2:14 and it's you know there's a whole chapter on it.

2:16 There's lots of permutations of luck, including the roulette wheel,

2:19 which which set of encodings you get thrown into at some,

2:23 you know, stage of life that just puts

2:26 you there that you didn't expect to be there.

2:28 We're talking about Grace Hopper earlier.

2:30 How'd she end up in computer scientists?

2:32 Well, World War II happened.

2:33 She got pulled out of being a professor at Vasser.

2:35 She was assigned to this project at Harvard she didn't even know existed.

2:38 And it was the first computer, the Mark1.

2:41 And that cast the dive for the rest of her life.

2:42 Well, without World War II or without that assignment, without right,

2:46 it would have been some other set of encodings that that went off.

2:49 But then I started looking at what are the types of luck

2:53 and I through this study came to see I think there are three.

2:56 There's what luck which is a good event that goes your way or a bad event.

3:00 You know, a cancer event would be a bad luck.

3:02 What luck?

3:02 There's hool luck.

3:04 And I think this is the often underappreciated gigantic kind of luck in life.

3:10 And my life is a continuous series of hoolock

3:13 events starting with Joanne, but others as well.

3:16 And bad luck, the bad luck of my father.

3:19 And then there's zeit luck.

3:21 and zeit luck which I didn't really see until this study

3:24 is when what you're doing just you know happens to fit

3:30 with a particular zeitgeist that's happening at the time of which you

3:34 did not cause but it is a huge reality so I mean

3:38 Benjamin Franklin you and I would never talk about Benjamin Franklin

3:41 if he had been born at a time that he wasn't there

3:43 for the revolution and the founding of the country and Alice Paul

3:47 if she'd been born 20 years later or 20 years earlier earlier,

3:51 she wouldn't have been there to bring

3:53 the 19th amendment and suffrage to a successful close.

3:56 She would have done something else, right?

3:58 But not that.

3:59 And so Jimmy Paige and had not been born in England,

4:03 coming of age in the blues rock revolution,

4:06 right there as all this great music was happening, right?

4:08 I'll just say briefly, people need to read it,

4:10 but the the entire founding story of Led Zeppelin is kind of when

4:14 you look at the number of things that had to go right.

4:16 Yeah.

4:17 It's just wild.

4:18 Yeah.

4:18 And there's that great quote from Robert Plant saying, "What was that?

4:21 The gods roared and you know,

4:23 lightning crackled and Blake wrote a poem from under

4:26 the ground and all England was reunited." You know,

4:29 it's just this great moment in that basement that where they had that first

4:33 song when they played train kept a rolling and the four of them came together.

4:38 Anyway, zit luck is a big one too.

4:40 And then what we found in this study is and I

4:42 think it really is a it's a very true finding.

4:46 They were really good at getting a return on luck when

4:49 luck came because they have that these things we called Natalie moments.

4:53 Not all time in life is equal.

4:55 And you recognize this is a not all time in life is equal moment.

5:00 And it requires an unequal response to an unequal moment.

5:05 And so now I come back to you, Tim.

5:07 If you're good at this return on luck thing.

5:10 Okay.

5:12 Yeah.

5:11 So the 600 tennis balls are coming at you.

5:14 one of them is the one that you decide to to hit.

5:17 What about your ability to kind of recognize it's

5:21 a not all time in life is equal moment

5:24 and to go to kind of a 10x intensity in that moment.

5:29 I'm curious how that plays out for you.

5:31 I think there's a lot of overlap and and certainly I I think

5:35 my maximizing return on luck has

5:39 an ROI distribution very similar to angel investing.

5:42 I So 80% of the times I hit the ball, it's like Marco and there's no polo.

5:49 Nobody hits it back, right?

5:52 But but every once in a while I'm like,

5:55 "Holy cow, I just scored the winning point in Wimbleton.

5:57 That's crazy.

5:58 Didn't see that coming." Yeah.

5:59 So I'll come back and answer that.

6:01 I think they're very closely related.

6:04 And I identify with the what who and Zeit luck

6:08 for instance when I started angel investing 2008 roughly 2008, 2009, 2010.

6:12 I mean, it was just a beautiful time to angel invest.

6:17 Yes, there's some skill involved.

6:19 I tend to disbelieve people who attribute

6:22 anything solely to luck or solely to skill.

6:25 It's usually some combination.

6:27 But there are definitely periods of time where I felt that not all time in life

6:33 is equal and this is where you need to apply some pressure to the vessel.

6:39 Yeah.

6:40 Right.

6:40 And that could be the first book which you

6:44 know we don't need to get into right now.

6:46 It could be early on the angel investing.

6:49 It could be for instance around 2015 deciding to like 10x 20x

6:56 30x down my bet on supporting science related to psychedelic assisted therapies.

7:03 And even back then starting also but now

7:09 typically non-invasive but sometimes invasive bioelectric medicine

7:13 brain stimulation I think that's I have very

7:15 high conviction that that is around the corner.

7:19 So taking a peek at the future that's not evenly distributed.

7:21 I feel that way about bielectric medicine right now.

7:25 So I think they're very tightly bound in a sense and question for you.

7:32 There's this term that I came across.

7:33 I I wish I had the attribution, but uh believe it was from someone

7:37 in Silicon Valley or at least someone in tech.

7:39 They talked about increasing the surface area of luck.

7:43 In other words, if you need luck,

7:46 if we're talking about good luck to stick to you,

7:50 how do you increase the surface area available to which that luck can stick?

7:54 And when I think about my own hoolock for instance,

7:59 it was entirely dependent in the world

8:01 of startups and even one could argue the success

8:04 of the first book on me moving to Silicon

8:08 Valley being in the middle of that switchbox.

8:10 Without that, forget it.

8:11 There was not enough surface area to which Hooluck could really stick.

8:17 Yeah.

8:17 And I'm just wondering if that resonates.

8:19 So first of all I think whatever the size

8:22 of the surface the idea of luck and return on luck

8:27 is always operating if you will right because I mean

8:30 you could be you know my family in rural northern

8:34 Oklahoma on my on my father's side isn't Silicon Valley

8:38 but my grandmother who grew up there you know she

8:41 had luck and return on luck that her life was

8:44 affected by I mean she was this beautiful Oklahoma farm girl

8:49 and she was working at the Witchah airport and this dashing

8:52 test pilot who was my grandfather Jimmy Collins landed

8:56 for fuel on a Memorial Day weekend and they met

9:00 and 4 days later they were married and it was like

9:03 okay this is a hoolock moment but we're both going

9:06 to seize that not all time in life is equal

9:08 and boom right you know so that notion of the luck

9:12 and return on luck can happen sort of anywhere There