Four Kinds of Luck

There are four kinds of luck.

The simplest form is extrinsic, something fortunate happens to you—we tend to call that blind luck.

Then there is luck that happens by increasing the number of chances to be lucky—we often see that in people who output an enormous amount and are in constant motion.

The next is luck from being skilled in a particular area and spotting lucky breaks that others don’t notice—this is prepared luck.

Lastly, there is luck that is drawn to you from being in a position where other’s luck becomes your luck—this is due to your unique characteristics, second-order luck. This is the hardest to understand, but consider the example of a deep sea diver who is the best in the world. When a sunken ship filled with treasure is discovered deep underwater, this opportunity will go to them because they are known to be the best.

See also:

• Naval Ravikant who originated this distinction in types of luck
• Lecture - You and Your Research provides a good example of prepared luck.
• Charlie Munger and Warren Buffet are both examples of luck due to unique characteristics (deals come to them, often favorably)

Links to this note

• Holding Two Seemingly Contradictory Ideas in One’s Head

  There is tremendous power in being able to simultaneously hold two ideas in one’s head that appear to be in opposition. Contradictions can create boundaries on thoughts—it’s usually unpleasant to have cognitive dissonance—and can lead to dogma. I’ve found that being able to stick with it, despite the discomfort, can be very powerful.

• Why Product Engineering Always Feels Kind of Wrong

  Something I’ve noticed about building products over the years is that it always feels like I’m doing it wrong. At the same time, it’s a clue about what’s really going on and what to do about it.

• How to Be a Good Product Engineer

  Companies don’t really want frontend engineers or backend engineers or infrastructure engineers. If you work at an engineering as product organization, they want good product engineers solving user problems. As an industry, this is poorly understood and little is written to help people understand the principles of good product engineering.

• Buy More Tickets to Win the Lottery

  An amusing talk by Darius Kazemi at XOXO, How I won the lottery, pokes fun at internet success and how we underestimate the role of luck. To win the lottery he says, buy more lottery tickets.

• Controlled Self-Deception

  Being successful is mostly luck but working smartly (skill plus hard work) increases your luck. The trick is to balance intellectual honesty (it’s mostly luck) with controlled self-deception (success is due to skill and hard work). If you are too honest, you become pessimistic and if you’re too self-deceptive you get a false sense that everyone less successful is lazy or dumb.

• Imitating High-Status People Doesn’t Work

  People tend to closely emulate individuals of high-status but the counter signaling they pick up on doesn’t work unless you are already high-status. For example, being an asshole to others because Steve Jobs was famously demanding and extremely blunt doesn’t work unless you are also a widely accepted product visionary, or spending many hours a day reading because that’s what Warren Buffet does won’t work unless you have decades of value investing experience.