New York’s Top Venture Capitalist Nailed a Research-Backed Secret of Success

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Fred Wilson.Photo: Noam Galai/Getty Images

Fred Wilson is kind of a big deal. He is arguably the top venture capitalist in New York City, and he has become synonymous with Big Internet Investments, from investing in Geocities in the first boom to his Union Square Ventures getting into Tumblr, Foursquare, and Zynga when they were more recently ablaze.

He’s also, as his blog attests, very articulate. Last month, Wilson gave the commencement speech for New York’s computer-science-oriented high school, the Academy for Software Engineering. Beyond congratulating the grads and encouraging them to work hard (Wilson still gets up at 5 a.m., he says), the VC gave some very practical advice that’s popularly dismissed but backed up by research: Get lucky. Or, more precisely, give yourself the opportunity to get lucky.

“Luck is not just catching a lucky break,” he said:

“You have to be able to recognize it as such. You have to prepare your mind to recognize the lucky break when it comes your way. The Internet emerging as a massive financial opportunity in the mid ‘90s was my biggest lucky break. But I had put myself in a position to take advantage of that lucky break by deciding to work in venture capital ten years before that, by working hard to get better at my craft, and by paying close attention to the emerging areas of technology. I saw the internet for what it was long before most people did. That was my luckiest break but I also knew it and jumped on it.”

As my colleague Jesse Singal has written about before, this is the sort of insight that has a high likelihood of infuriating Highly Successful People, since there’s a sense that luck robs people of agency. Thanks to something called hindsight bias, humans — in their endless attraction to clean narratives of cause and effect — tend to see events in tidy arcs: Of course Steve Jobs became successful, he had an unmatched sense of urgency; of course the Golden State Warriors lost the NBA Finals, you can’t win if you can’t hit open threes. This is part of what Nobel Prize–winning psychologist Daniel Kahneman has identified as an intensely human trait: We’re constantly constructing stories from imperfect evidence.

But the best thing we can do in decision making — in creating our lucky breaks, as Wilson advised the grads — is to be really mindful of the way we interact with with imperfect information, which means to embrace probability. In fact, as Charles Duhigg concludes in his book on productivity, Smarter Faster Better: The Secrets of Being Productive in Life and Business, this is what sets professional poker players apart as decision makers; they’re expert at “probabilistic” thinking. “What it means is you have this ability to envision multiple futures that sometimes contradict each other, and to force yourself to figure out which ones are more likely to happen and why. This is kind of an alien instinct, since we only experience the present one way,” Duhigg explained to me in an interview earlier this year. “I know intellectually that five things could happen to me this afternoon. Once I know which possibilities are more likely, I can influence [them], I can see more deeply how the choices I’m making right now influence the future that comes true.”

Richard Wiseman, a psychologist who studies luck, has said that the luckiest people are those that “generate their own good fortune” by creating and noticing opportunities, a habit heightened by positive expectations. It’s like what Seneca is attributed to have said: Luck is what happens when preparation meets opportunity. Or, as Wilson concluded his speech:

Everyone gets lucky breaks in their life. I can’t tell you when your lucky breaks will come. But I can tell you that they will come. You must be able to see them for what they are, you must be in a position to act on them, and you must not miss them. Pay attention, look carefully, and be prepared for your lucky breaks.

Or, to rephrase the Silicon Valley maxim, the best way to predict your future is to make it — like Wilson did by getting super familiar with the internet and making big bets on dot-com firms when they were called dot-coms. With this framing, “luck” doesn’t rob you of agency: It’s your responsibility to help create what happens.