Business — 90% Grit, 10% Luck

Hang in there. Business is rough

It’ll drive you bonkers if you let it, but also escort you to levels of elation that Jim from Accounts won’t ever feel.

You have to stick with it, though.

I remember my first job after Uni. It was in Venture Capital. I was a Junior and didn’t have a clue. Still don’t to be honest.

One of my most poignant memories is of attending an Investment Committee once. A colleague, and a seriously valuable mentor, was pitching on behalf of one of his portfolio. It was about the fourth time they had invited us to exercise our pre-emption rights in a new funding round.

That’s VC speak for — we’ve ran out of dough again, chip in guys please. Please.

Embarrassment was written all over my colleague’s face. He was an astute, commercial individual and understood this was now akin to roulette. Relatively, it was a small figure so the committee agreed to it and I dutifully wrote up the minutes accordingly.

The mirth and condescension around the room was palpable, though. The Chairman wore the air of a man being asked to bail out the Boy Scouts’ Blackpool Fund. A large, comedy charity cheque was suggested.

Roll the clock forward to 2018 — flicking through the pages of Bloomberg, I spotted a few familiar faces — they had listed on the stock market!! A proper IPO. My previous employees’ stake was worth a genuine fortune.

Given the choice side by side, I’d have had a tenner on Sir Trevor McDonald charging past Usain Bolt in the 100M before this crew went public.

I guess they hung in there. I guess they saw off the rough times, and got a couple of lucky breaks.

Indeed, if you look at the data (Federation of Small Businesses), it is the Companies that stay in business that pick up that successful exit.

- 77% of publicly reported trade sales in the UK concerned Companies that had been in business for at least 10 years.

- 91% had been trading for at least 5 years.

Call it “external market forces”. Call it “positive factorial alignment”. Call it whatever you need to call it.

Personally, I’ll call it good old-fashioned luck. It’s not a fashionable thing to say — but hang in there in business long enough, and you just might get that lucky break. Or, let the pressure consume you and fold — and Lady Luck might be knocking on a bolted door.

Let’s look at three examples that I’ve seen first-hand:

1. The writing was gouged all over the wall. — “DOOMED”. The Grim Reaper had positioned himself adjacent to HQ to aid a swift kill. If this business was a human, I would not have recommended the purchase of any green bananas.

Just as all looked lost, the Founder glanced over his shoulder in a hotel bar and saw the Senior Executive team of a Company they had been trying to align with for over two years. He took his shot. He accosted them, pitched, and won a contract worth £2Million.

2. I never rated this business. I thought it was a Trevor McDonald-esque “Moonshot” type thing. No one was buying. The Founder had just arrived at a Tech Conference, one of those very popular and cool ones, and entered a contest. The winner got a chance to pitch on stage. She won, she pitched, she walked away with a healthy business.

3. This guy was honestly like Job of Bible Fame. The chap who was tested by God — had his animals killed, his children and other trifling matters. Our present-day Job led the Company for nine years without a salary. The end of the month was hellish for him as he tried to make payroll. Somehow, he kept doing it — week after week, year after year. Finally, the stars aligned, and a nicely timed industry scandal suddenly made his software flavour of the month. He passed God’s test, and sold his business for many Millions of Pounds

What’s the lesson here?

Well, in those three real life examples, I can’t really ascribe success to anything other than luck or good fortune.

They hung in there long enough to capitalise, though. That’s the lesson. If you truly believe in your business, then keep fighting. Who knows what’s around the corner.

I don’t recommend walking into your boardroom and espousing the virtues of luck, or tell tales of the two magpies you keep seeing. There is no quicker way to a P45 other than spitting on the Chairman. There is no shame the cost base back if you have to, though, and hanging tight through the rough times. Probably quite applicable during pandemic times, for instance.

Obviously, this works for tech Companies. If you have been running “Keith’s Sausage Roll Van” for a decade unsuccessfully, time to pack up and head home probably, I can’t see luck saving you.