If there had been no Lakeside, there would have been no Microsoft…

This is what Bill Gates told the school’s graduating class of 2005. Lakeside was the high school Gates attended.

Bill Gates attended one of the only schools in the world that had a computer back in 1968. Gates was 13 years old then, probably in grade seventh or eighth.

This story is well-documented in Morgan Housel’s book, The Psychology of Money. Based on data gathered from the UN website, Housel deduced that Gates had a one-in-a-million head start by going to school at Lakeside. Just imagine, if Gates wouldn’t have been at Lakeside, or if Lakeside did not invest in a computer at that time, what were the chances for Microsoft?

The book also tells us the story of Bill Gates’ best friend Kent Evans. Like Gates, Evans too had a vision for computers. He was one of the three high-school computer prodigies — alongside Bill Gates and Paul Allen. He even shared Gates’ business mind and endless ambition for computers. Unfortunately, Evans died in a mountaineering accident at the age of 17. Again, Housel highlights that the odds of being killed on a mountain in a high school are roughly one-in-a-million.

Two people at Lakeside — one experienced a powerful dose of luck, while the other, experienced a rather eventful dose of risk.

The world is just too complex to allow 100% of your actions to dictate 100% of your outcomes. Just imagine the fate of an ambitious entrepreneur who started his first restaurant or invested every penny in his new travel company in February 2020, at the start of the Coronavirus pandemic. Or, consider the example of the father of value investing Benjamin Graham, whose success was largely owed to buying the GEICO stock, which by his own admission broke nearly every diversification rule from Graham’s teachings.

Luck and risk, are perhaps the most controversial and even misunderstood topics in life and business events. A team of Italian scientists conducted a study to find out the role of luck in life success and found out that luck plays a much greater role than most people realize. They discovered a strict correlation between success and luck.

From my own little world, I graduated in 2001, with 2 job offers in hand — both companies being the top #1 and #3 in the country. Unfortunately, I graduated at the time the dot-com bubble had just burst, and airplanes were being flown like darts into the World Trade Center buildings in the US. The result — a fresh graduate, who was among the top 10% and with 2 job offers, yet no one was calling. Call centers put an “over-qualified” label on me when I applied to their job openings. I put 100% effort into getting that engineering degree from a top college, and another 100% effort into getting offers from these 2 companies. The world is too complex to allow 100% of your #actions to dictate 100% of your outcomes.

Today, when I look back at 2001, I see the picture differently. 2001 gave me the opportunity to come out of my cocoon and explore the world. I took this jolt as an opportunity for further education in a foreign country. Yes, it helped me tremendously — attitude-wise, knowledge-wise, and experience-wise, but most importantly, I met my wife there! And, you won’t believe it if I tell you this — we lived about 3 blocks away from each other in India, and yet our paths never ever crossed each other, while we were there.

My reason for posting this article: Give your 100% effort, do your best, yet don’t discount the silent contribution of luck and risk in the outcome. They often figure more prominently than you think.

Or, as Morgan Housel puts it, “You are one person in a game with seven billion other people and infinite moving parts. The accidental impact of actions outside of your control can be more consequential than the ones your consciously take.”

What are your thoughts on luck and risk? Do you acknowledge their presence in determining the outcomes in your life?

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