Originally published at: https://blog.12min.com/lucky-or-smart-pdf/
Secrets to an Entrepreneurial Life
Could it be that billion-dollar-worth entrepreneurs have been merely lucky?
Or are they – as the media would have you believe – much smarter than you?
Maybe it’s both?
Bo Peabody, a successful entrepreneur himself, answers the question from his own experience.
So, find out whether he was “Lucky or Smart?”
Who Should Read "Lucky or Smart?"? And Why?Luck is a big part of business life," says Bo Peabody, "and perhaps the biggest part of entrepreneurial life.
Not something you’d expect to hear from an entrepreneur dubbed “brilliant” by the press of the 1990s.
Well, that’s why Peabody wrote this book.
And that’s why you – first-time entrepreneurs, startup founders, Steve-Jobs-wannabes – should read it right away.
About Bo PeabodyBo Peabody is an American entrepreneur and venture capitalist, currently the owner of Renzell and a Venture Partner and Entrepreneur-in-Residence at Greycroft Partners.
Back in the 1990s, he founded tripod.com, one of the earliest dot-coms and, at one time, the eight most visited site on the Internet. Afterward, he founded at least five other companies – all of them successful.
“Lucky or Smart?” is his only book so far.
"Lucky or Smart? PDF Summary"In 1992, Bo Peabody was a 21-year old student at Williams College, with a relatively simple idea: to use the emerging Internet technology to create an online community for college students.
So, he teamed up with a college classmate named Brett Hershey, and one of his professors, Dick Sabot, and build tripod.com, a “hip Web site and pay service for and by college students.”
It may not seem that hip today, but back in the 1990s, it was one of the hippest things you can think of!
Especially after Peabody – who was the company’s CEO – realized that people used Tripod’s Homepage Builder much more than anything else and pivoted the company in a new direction.
So, by 1996, tripod.com had transformed from “a ‘practical advice for students’ website” into a webpage-creator, with an idea “to build a community through user-created and user-based content.”
After receiving an initial investment of $3 million dollars from NEA, in 1997, Tripod collected $10 million more, and by the end of the year, it numbered 40 employees and all but million registered members!
Even so, it never posted a profit, and “generated barely any revenue.”
Be that as it may, on December 30, 1997, in exchange for Tripod, Peabody was offered $58 million in stocks of a publicly traded company named Lycos.
The very next day, Peabody agreed to sell, consenting to a lockup which forbade him to sell his Lycos stocks for two years.
The lockup clause turned out great:
In two years, the value of the stock increased tenfold.
And at the height of the dot-com bubble and just a few months before the market crashed, on the very last day of 1999, Peabody sold nearly every share of his Lycos stock.
What did he do with the money?
Taking advice right out of Buffett’s, Lynch’s and Munger’s book of no-tricks, he invested it in bonds and real estate – because he needed a house, but also because these were “the only two investment vehicles [Peabody] could thoroughly understand.”
Don’t forget the most important part of this story:
At the time, Peabody was merely 27 years old!
So, was he some kind of a genius – or did he get lucky?
“In response,” he writes,
most people give a two-part answer: they recite the trite adage ‘I’d rather be lucky than smart,’ and then they sigh and say, ‘Well, you know, it was a little of both.’
I give a different answer:
‘I was smart enough to realize I was happy.’
And that’s the right answer.
In our opinion – it’s also a great answer!
And it’s the main lesson from this very brief (originally correctly subtitled “Fifty Pages for the First-Time Entrepreneur”), but ultimately very rewarding book!
Namely – that in business, people tend to confuse being lucky and being smart, even though sometimes their success is the equivalent of finding $20 on the street!
You should not do that: your job is to be humble and keep your ego in check.
With that being said, there are some things you can do to force your luck:
#1. Found a company which is fundamentally innovative, morally compelling, and philosophically positive.
These are the companies around which smart people who work hard gather – and, you know what they say, the harder one works, the more luck one has!
#2. Practice blind faith.
When one starts something fundamentally innovative, one is bound to get one or two thousand “you’re crazy” along the way. Loving your startup and believing in it blindly will do the trick – otherwise, you’ll give up the moment the first obstacle arises (and there will be hundreds).
#3. Learn to love the word “no.”
Nobody hears the word “no” more than entrepreneurs; consequently, nobody should accept it less.
When his college application was rejected, Peabody rang the assistant director of admissions and told him that he “reject his rejection.”
He worked with him on a year-long program to fix the faults of his application, and, lo and behold, the following year he got in!
#4. Don’t believe your own press.
The press likes the story of the Jobs-like CEO – the genius capable of transforming the world in an hour. And so – it sells this story to the public.
It’s not the true story, however.
In the case of Peabody, he sometimes worked 100 hours a week, even though, based on what people read in the newspapers and watched on TV, he was a skiing-going CEO-slacker who couldn’t care less about work.
So – once again –
#5. Know what you don’t know.
Don’t let others fool you.
A large part of success comes from luck.
Don’t be smart about things you don’t know.
It may cost you a fortune!
Key Lessons from "Lucky or Smart?"1. Entrepreneurs Are B-Students, Managers Are A-Students 2. Understand the Difference Between Being Lucky and Being Smart 3. Keep Your Ego in Check at All Times
Entrepreneurs Are B-Students, Managers Are A-StudentsThere’s a reason why Warren Buffett never manages the companies he buys.
In Bo Peabody’s opinion, that reason is very simple: because entrepreneurs and managers live in two different worlds.
While the former are born and not made – the latter are made, and rarely born.
Bo Peabody was an entrepreneur even at the age of 10 when he was mowing other people’s lawns for some extra cash.
However, he always knew that he was only great to start things – a sort of a Jack-of-all-trades – not to manage them.
With some notable exceptions, this is almost always the case.
So, if you want to be an entrepreneur, be aware that a large part of your job is to attract and motivate the best managers.
Understand the Difference Between Being Lucky and Being SmartMost startups end up unsuccessful because entrepreneurs fail to realize the difference between being lucky and being smart.
In the opinion of Peabody, this is the “one overarching theme that ties all of [his] observations together,” the one thing he is “absolutely, completely, one hundred percent sure you should take heed of, and never forget.”
So, you can ignore all of his other advices – but don’t ever overlook this one.
Keep Your Ego in Check at All TimesEgo – as useful as it can sometimes be – is your enemy to understanding the difference between being lucky and being smart.
It’s what may tempt you to believe your own blown-out-of-proportions press.
It’s also what may stop you from turning over your company to more capable managers or lead you to ignore the advices of people who are smarter than you.
In a nutshell: more often than not, your ego is your enemy.
Keep it in check.
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"Lucky or Smart? Quotes"[bctt tweet="If your idea is big enough and crazy enough, all you have to do is survive. If you survive you will succeed." username="get12min"]
[bctt tweet=“Luck is a part of life, and everyone, at one point or another, gets lucky.” username=“get12min”]
[bctt tweet=“Luck is a big part of business life and perhaps the biggest part of entrepreneurial life.” username=“get12min”]
[bctt tweet=“The number-one killer of start-ups is when entrepreneurs confuse ‘being lucky’ with ‘being smart.’ You must possess the humility to distinguish one from the other.” username=“get12min”]
[bctt tweet=“Was I lucky? You bet your ass I was lucky. But I was also smart: smart enough to realize that I was getting lucky.” username=“get12min”]
Our Critical Review"Lucky or Smart?" is one of the most honest books ever written by an entrepreneur.
Most will toot their own horns and tell you that they had great ideas and were brilliant all the way.
Peabody says something that rings far truer: he was smart enough to realize that he was lucky.