Whoever has, more will be given: the silent role of luck in entrepreneurship

The narrative of entrepreneurial success is incomplete without acknowledging the significance of luck and variance to help many entrepreneurs in turning their original idea into a viable business. photo | FOTOSEARCH

In the modern world, success stories in entrepreneurship tend to focus more on skill and proper planning while in most cases there is a huge part that chance plays.

Recently, I encountered Amina who is a prominent entrepreneur. Having embarked on a journey to establish an organic food manufacturing business, she focused on locally sourced snacks. Amina started her venture during a period of heightened climate variability. In one scenario, the region experienced irregular rainfall, leading to crop shortages and increased prices for many raw materials.

Recent shifts in consumer preferences and buying behaviours in the food industry presented unexpected opportunities, especially with a sudden surge in interest in organic, healthy snacks. Moreover, regulatory changes and geopolitical events introduced additional layers of variance. But she navigated these challenges by establishing a robust model and diversifying her market presence.

The case of Amina’s success as an entrepreneur in the food manufacturing industry is not solely determined by her initial business plan or hard work. But her ability to embrace and navigate the inherent variances, whether in climate, market trends, eco-systems that is framed by regulations and also external factors.

In the business world, luck can be manifested in various forms. For example, it can be stumbled upon as a groundbreaking idea at the right moment. It also can be seen when one meets a key mentor, or even securing a crucial investment when the stars align.

Variance, the inherent unpredictability of outcomes, is another element in the entrepreneurial journey. No matter how well-researched a business plan may be, external factors and unforeseen events can significantly impact results.

Entrepreneurs who understand the role of variance recognise that failure isn’t always indicative of poor decision-making. Rather, it’s an inherent part of the journey—one that provides invaluable lessons and insights for future success

In fact, a 2015 study by Smith and Sims on the role of luck in the success of award-winning individual’s entrepreneurs, such as Nobel laureates, he said that luck plays a substantial role in the recognition and success of these high-achieving individuals.

Additionally, the 1968 study by Robert K Merton revolves around the idea of the “Matthew Effect”, which is based on a bible verse: “For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them.” According to Merton, the Matthew Effect suggests that those who have an initial advantage will accumulate more advantages, while those who start with disadvantages may find it increasingly difficult to overcome them.

It is therefore critical to understand the success of entrepreneurship beyond individual traits and abilities.

With many young people entering into start-ups, we need to consider the broader context, including cultural, societal, and historical factors that may contribute to someone’s achievements.

By doing so, we will develop frameworks that can address the challenges being faced by many entrepreneurs and also the belief that success is solely the result of individual merit. In a world being defined by technology, the narrative of entrepreneurial success is incomplete without acknowledging the significance of luck and variance to help many entrepreneurs in turning their original idea into a viable business.

Edwin Obonyo is a PhD student in Strathmore University Business School.