In a comment to my recent post on Focus, Ray Hood pointed out that VCs often overlook the importance of luck, chance, and serendipity in favor of a belief that everything is formulaic. I violently agree with Ray but I also violently disagree.

As I mentioned in my response to his comment, I am a huge fan of Nassim Nicholas Taleb's books - The Black Swan and Fooled by Randomness. In Fooled by Randomness, NNT expounds at great length on how often times people confuse the fact that they have been lucky with a belief that they are really just smarter than everyone else. As he says, randomness plays a much bigger role in how successful you can be at some professions than others. For example, the degree of success of a nurse or a doctor has much less to do with randomness than say that of a venture capitalist (his example). It's difficult to argue with luck playing a part in the magnitude of any win. Anyone who was a part of the startup scene during the bubble knows well that there were many >$1B exits that in any other market may not have been able to make any money at all.
About the author: Greg Gretsch

Greg Gretsch is a Managing Director at Sigma Partners, in Menlo Park, CA. He was an three-time entrepreneur before moving over to the dark side in 2000. He's also an active blogger at
Dispatches From The Darkside.