Guy Raz has been doing the How I Built This podcast for a while, but I only recently started listening to it. On each episode he talks with someone who built a company: Lululemon, Eileen Fisher, Jet Blue, Sierra Nevada, Uncle Nearest Whiskey, Five Guys, etc. One of the things I like about the show is that at the end of the show he always asks them how much of their success was due to their hard work and how much to luck. Most of them attribute a lot of their success to luck.
Chip Wilson the founder of Lululemon noted that at one point failure was only averted because another company he was working for was bought out and he received a severance package that enabled them to make payroll. He also gave an interesting answer at the end when asked about the role of luck. His answer was essentially that he was lucky that the world was ready for what he was passionate about: athletic wear that was both functional and attractive. His first venture in clothing design was comfortable shorts for himself. The story makes clear that he gave some thought and did a little research before directing that passion toward yoga, but in the end, he makes it sound like he would have continued working on athletic wear even if his success had been less spectacular.
It reminds me of one of my favorite papers on entrepreneurship: John Vincent Nye. "Lucky fools and cautious businessmen: on entrepreneurship and the measurement of entrepreneurial failure." Research in Economic History 6 (1991): 131-152. John was one of my professors at Washington University and this paper was published in a special issue of Research in Economic History in honor of Jonathan Hughes, author of the Vital Few: The Entrepreneur and American Economic Progress and one of John’s professors at Northwestern. John argues that we should view of entrepreneurs not as especially insightful or risk taking but as overly optimistic people who occasionally get lucky and hit on something really profitable:
After years of writing about business history and financial failure this is still the way it looks to me. A lot of people think they have great ideas that make them underestimate the risk of their venture. Most often they are wrong, but every occasionally someone is right. People then have tendency to attribute their success to something special about the person, despite the fact that many of them failed repeatedly. Ford is probably the classic example both because of the bankruptcy of his first company and because of some of his spectacularly bad choices after the Model T.