Storehouse of Luck/Stages of an Entrepreneur’s Life

Storehouse of Luck/Stages of an Entrepreneur’s Life

I have always felt that a person was born with a certain amount of luck and that over a lifetime one tends to use it up. I have heard the expression: “The harder you work, the luckier you get”. And actually, I tend to agree with this statement—there is no substitute for hard work, attention to detail and application of sustained effort over long periods of time to create a great, new enterprise.

But having said this, some people just seem to be luckier than others and I felt that maybe an understanding of the role that luck or serendipitous events can play in your success as an entrepreneur might actually help one become more successful.

Keep in mind the expression: “Don’t press your luck” too. If you have used up a lot of luck in creating a successful business (and just about everyone does), don’t throw it away—read on for more about this.

Anyway, here is my take on the ‘storehouse of luck’ theory and how one might use it up over a lifetime.

I am measuring luck in units I call ‘Megoolies’, a silly, made-up name. By (my) definition, you are born with 100 Megoolies. Childhood diseases, bike accidents, car accidents and the siren call of drugs and alcohol use up a lot of your Megoolies by the time you are 25.

Then you decide to start a new enterprise at, say, 25. Your decision to begin a new enterprise is founded on what College Pro Painting refers to as ‘uniformed optimism’—you believe you can’t miss and this is based on the fact that you really don’t know what you are in for. Every new enterprise takes more time, effort and money than you ever thought possible to (perhaps) become successful.

After this stage comes a crisis in confidence—here you either persevere or you end the enterprise, in failure.

After this comes an informed confidence—you actually have some idea of what it takes to be successful and you can apply the lessons learned over an extended period of time to become more and more successful.

Around 35, you figure you can’t miss. You have become overconfident—a Messiah complex sets in. You get a good offer to sell your original business and you figure, why not? ‘I can always create another one just like that,’ you say, snapping your fingers. What you don’t realize is that by this point in your life you have used up more than half your allotment of Megoolies and starting a new enterprise is not easy—you have a husband and kids (or wife and kids) and a humongous mortgage and a lot of other obligations and you have foolishly sold your original business and now reality is beginning to set in.

Even if entrepreneurs don’t actually sell their businesses at this stage, they often lose focus, take a step back from the day to day running of the business, start trying a lot of new things, get divorced, start multiple new unrelated enterprises, lose their focus, whatever. It doesn’t take very long before the original business starts to fail.

If you get through this stage*, then you actually start to mature as a person and your business enters a sustained growth phase—from around 40 to 55.

After 55, the ‘new 40’ (I am not there yet BTW), my father told me, one should plan on a consolidation phase—lowering leverage (debt), taking fewer risks and basically managing the business and accepting a somewhat lower growth rate.

After 70 (ahem, the new 60), begins the disposal stage and succession. After 85, you are an elder.

Speaking from personal experience, I used up at least 90% of whatever Megoolies I was born with before turning 50. I was deathly ill as a little kid (the Doctors at Sick Kids Hospital in TO saved my life), I flew hang gliders in Australia as a young adult (and crashed from 500 feet), I started or helped start over 70 different businesses, I bet the ranch on a NHL expansion franchise (the Ottawa Senators) and won the franchise (but lost the ranch).

Bottom line for me—stick to teaching, consulting and low risk business enterprises for the duration. Oh well**.

* Getting through this stage might mean not entering it to begin with. Instead of getting divorced, losing your focus, selling your original (successful) business, getting seduced into starting multiple, unrelated ventures, spreading yourself too thin, why not just decide to not do any of these things?

** Here is a note I sent to a few of my acolytes, which may be instructive as to why I wrote this: “Hey Folks: read this article. I wrote it for people your age who are creating successful businesses and who will soon enter a new stage in their business lives- over confidence. My Dad told me there are stages in life: A) 25 to 35 start a new biz; B) 35 to 55 high growth phase; C) 55 to 70 consolidation phase; D) 70+ disposal phase. There are some risks along the way that maybe you can avoid if you know that they are there. Regards, Bruce”