Review of Bo Peabody’s “Lucky or Smart”

I was initially exposed to “Lucky or Smart” by “The 100 Best Business Books of All Time“. I do most of my reading on the Internet, but “The 100 Best…” is a great coffee table book. It’s also turned me onto some good business book, like the one in this review.

What I truly love about books written by successful people is that they’re literally half the size of books written by “professional” business people and, typically, a lot more to the point. Let’s face it, if no one buys their book, they’re still rich.

What 100 Best books basically said about Bo Peabody’s book was that business success has more to do with luck than people think or want to give credit to.

I contemplated the famous Gary Player quote, “The harder you work, the luckier you get.” Now, Gary was a famous golfer and he probably felt that the more balls he hit or the more he practiced the luckier he got on the course when it mattered. Now you can’t win a golf tournament on just luck, but you need some. So how does this apply to being an entrepreneur? Read on.

Sometimes, I think that you can do everything right, but if a few things out of your control do not go your way; you’re probably just going to get by. Getting by is what most people on the planet are doing. In this book, Bo, gives some practical advice on putting yourself into a position to get lucky.

I love Bo Peabody’s example. His big success was Tripod. How about the following coincidences:

  • What if his professor, Dick Sabot, did not have a near death experience that prompted him to collaborate with Bo and start Tripod?
  • What if Lycos does not buy Tripod, which resulted in $58M in stock.
  • What if Lycos paid Bo in cash instead of stock. Contractually locking his stock up for two years allowed it to appreciated 10 times to $580M?

All of this was out of Bo’s control. So I guess I just defined what luck is. When something out of your control goes your way.

Right out of the gate, Bo says, “…’being lucky’ in business has an intoxicating underbelly called ‘being smart’…” and leads to his single most important belief:

“…lucky things happen to entrepreneurs who start fundamentally innovative, morally compelling, and philosophically positive companies.”

And why is this? Because this is how you attract truly remarkable people. Truly remarkable people lead to serendipity, where fortuitous or lucky things happen by chance. How do you attract serendipitous or lucky outcomes:

“The best way to insure that lucky things happen is to make sure a lot of things happen.”

The serendipitous moment for Tripod was three years in. The developers put a home-page builder on the site. Tripod’s original business plan was to offer advice to college students. So how did the home-page builder float to the top? Luck. Does Lycos buy Tripod without it? Probably not.

It’s important to know the difference between thinking you’re lucky and knowing it. Bo writes,

“Good entrepreneurs are not, per se, lucky or smart. They are just smart enough the realize when they are getting lucky. It’s a subtle, but very important distinction.”

The book also goes on to clarify that although, you the entrepreneur, or B-student, do not have to be super smart, your job is:

“…to attract, organize, and motivate A-student managers. And the only way we can do that is to realize , accept, and embrace the fact that we are B-students.”

Once you get people, good people to join you, now everyone’s working together until effort and luck intersect. Some people would call this fate. This is exactly what happened to Lycos bought Tripod.

Bo does not mince words or hold back punches. For example, he is very adamant when differentiating between someone who is and is NOT an entrepreneur.

Anecdotal, this leads me to the first business I started. I did not realize it back then, but my partner was very entrepreneurial. He thought that I was an A-list manger at the time, but I was really the tadpole of an entrepreneur. The business went badly, quickly. In the end, my partner was not a good judge b/c he got me totally wrong. He thought I was an A-list manager because I worked for a large bank and had a college degree (which he lacked). In hindsight, we should have found the right manager. We never did and I sold out after one year got the $30k back that I invested. Eventually, he sold out two years later and lost about $150k.

This experience is what made me believe that I had no choice, but to be an entrepreneur. I’m probably not employable. After getting canned, the hardest part was that second pay stub. The first one goes pretty unnoticed, but when that second check does not come, reality sets in. It took a toll on me at first, but I realized that the paycheck and the mortgage is what kept smarter, more talented people out of business. I never wanted to rely on someone else for my livelihood.

I would like to compare my entrepreneurial skills to my golf game. The first five years, hacking away, I could not break 100 and then one day, I’ll start shooting in the 80s.

Let’s talk about start-ups. Are successful start-ups just small version of blue chip companies? Most people and many business owners think that if they operate and make decisions like GE that they can be like a GE. Bo writes that it’s more important to survive as a start up and that being great is not the goal. You should leave perfection to the big successful companies (ok, I’m being a little sarcastic). If you’re good enough and can keep your head above water, progress comes. Besides, when companies “try” to be a certain way, it’s got to be difficult to do the right thing at the right time.

Maybe big companies buy smaller, innovative companies b/c it’s not their nature to be that way and they need someone who has the patience and is willing to deal with all the uncertainty. Big companies have huge egos and they do not deal with failure very well. They take it personal. An entrepreneur can’t or they would give up after a few weeks.

A start-up is all about the people. Jumping forward to chapter 5, Bo tells his story of working with sociopaths. He characterizes sociopaths as people that do not behave up to societal standards. This, partially, makes them ideal for a start-up. Notice we did not say dumb sociopaths, which is the other part.

Start-ups are the underdog’s underdog. What makes these employees a good match is that they’re just motivated by different things than other people. Most people want to just get paid. They don’t have the appetite for working a job they could lose next month b/c the company went out of business. It’s just too risky for “smart” people.

So, what’s Bo’s advice for finding gifted sociopaths? Don’t pass judgment. If you judge people, you’re just making the list of people that would take a chance and work with you even smaller. Many of these people can be very loyal and smart.

Ok. So you found the brains and your site starts getting a ton of traffic. Do you buy into the hype? In the late 90’s it was easy to mistake an Internet entrepreneur for a rock star. At least that’s what the media wanted us to believe. It’s what sells more newspapers and magazines. Most start-ups have very little or no profits. People start talking about money like they’re playing Monopoly and you’re crashing on your buddies couch. So use it, don’t abuse it.

Now you’re the main guy, what’s more important than anything? What’s the main focus of the leader or CEO of a start-up? It’s not getting the product right.

“It’s creating a market for your start-up’s stock.”

Leave the product and TPS reports to your A-list managers. “Good VCs know that the key ingredient in a start-up’s growth is not actually how big the company will be but how big the entrepreneur thinks it can be.” In the end, the VCs are looking for a business that, not only will sound good to them; but will sound good to the big companies above them. So let’s not forget what we learned from watching Scarface 20 times during college. “Don’t underestimate the other guy’s greed!”[laughing]. VC’s are greedy, so work with them, not against. They’re there to make sure you don’t sell your $50M business for a new Porshe and $100k.

Faith. Let’s face it, if you don’t believe in your business no one will. You also have to think big. Have you ever heard someone that made it thinking small? Nobody even uses that phrase. Most failed or under achieving start-ups are a result of a selfish act when the owner(s) start bending the business around them. If you want to get big, you have to do what’s right for the business and not only if it’s right for you.

In my opinion, the most important quality of an entrepreneur is: What you believe. What you believe gets you out of bed in the morning and helps you work through the night. A man without beliefs is a robot. I don’t know too many rich robots.

If you don’t believe in something, how can you sell the idea to yourself or other people. There’s a fine line between faith and insanity, but being wishy-washy about your idea will probably get you nowhere and waste everybody’s time. Try wasting rich people’s time. You will not get a second chance.

The conclusion to this book talks about the ego. I was pleasantly surprised reading about this. Bo’s basically saying, don’t get in your own way to success b/c it’s not your idea or dream that’s making the start-up work. Understanding that your ego is constantly at work allows you to see when your success is a direct result of something you did or just plain luck.

“Your ego is both the most dangerous and the most useful weapon in your entrepreneurial arsenal. When used wisely, ego helps entrepreneurs craft their start-ups’ missions, work hard, and keep blind faith i their companies, even in the face of heavy scrutiny. Ego also gives entrepreneurs the confidence to sell their start-ups to partners, customers, and investors, and the courage to act like famous international CEOs even when they know they are really just playing a role……..and ego is the force that allows entrepreneurs to get comfortable with their powerlessness and learn to love the word “no” instead of panicking in the face of it.”

I learned a lot from playing competitive sports. A true winner plays harder when they’re down. Just like a good entrepreneur turns it up when they hear the word “no”. People should look at the word “no” as “try again”.

Accepting failure and “no” as temporary, is an incredibly valuable quality in life. I’m not saying that “no means yes”, but there are a lot worse things that people can say to you than “no”. Besides, why let a two-letter word beat you? Be gracious, but diligent when you hear “no” and people will admire you. This makes it harder for them to say “no” each subsequent time.

It’s hard to believe Bo squeezed all this wisdom into just 62 pages. This review is so long that you probably should have just skipped it and read the book 😉

If you can’t wait to read the book, check out this article in Inc. Magazine. It’s a scaled down version of the book.

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  • By Book Review: The E-myth on May 31, 2011 at 11:53 pm

    […] Now, let me  qualify this.  It’s a small business book, but it does a great job describing the relationship between the owner and his business.  After reading the E-Myth, I had a revelation:  most startups have a huge luck component (as opposed to a little luck).   For more on how to get lucky, you can read my post titled “Review of Bo Peabody’s “Lucky or Smart” […]

  • By Biz Stone on Succeeding….Where Others Fail on November 8, 2013 at 3:02 pm

    […] more….read my blog post about Bo Peabody and the difference between being good and gettting […]

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