Entrepreneurs and Luck...

In a thread below dealing with "The Pampered Chef", Dien gave his viewpoint on the factor of "luck" as it applies to Doris Christopher and dynamic growth of her company "The Pampered Chef". I have to agree with him--there was a certain amount of "luck" involved in the success of the venture. I think the same thing could be said of any successful venture. "Luck" has to play a certain part right?

So the question comes in where does "luck" come into play and where does it not? And in her case how much did luck factor into the equation and can we find something similar for ourselves?

Lets turn the clock back to 1980 when Doris started her business. Here she is with an 8 year-old and 5 year-old and she wants to be a stay-at-home mom. No problem there. The fact is the economy was much worse than it is today. Higher unemployment, higher prime lending rate, higher rate of inflation.

On top of that the stock market had yet to start its miraculous accent. Was she lucky starting a business in 1980? Probably not, it may have even hurt her to some extent.

Doris took inventory of her skill sets and her most important skill was that she was a teacher, an economics teacher by trade. She understood the proper use of kitchen tools. That was her skill set. That's a good skill set but is it "lucky"? Heck there are thousands of people trained as Economic's teachers. Then consider all the other folks out there like cooks, chefs and just regular folks that could do what she did and that was just having a good understanding of kitchen tools.

People remarked to her that they were impressed with her ability to use those tools. I'm sure there are skills each and every one of us have been complimented on from time to time, just like Doris was. Really not much luck there. We're all skilled in one area or another (if not multiple areas).

What about the idea of selling kitchen products through a home party environment? Not really lucky there. That type of direct selling has been around for ages. Maybe the format she used for the party was lucky or did that type of presentation just make good sense considering what she was selling and to whom she was selling it to?

There might have been some luck (or was it perseverance?) to actually go out and have her first Kitchen Party? I could see someone posting a message like this on a forum like this forum:

"I've got a great idea for a business and I just want to get your opinions on if you thought it would work. What I want to do is go into people's homes and show them how to use kitchen gadgets like potato peelers and spatula's and Wisk's more efficiently. And in the process I'll sell them better quality gadgets than they have now. What do you think?"

There might be some encouragement but there might not also. I could easily see someone writing in response:

"Most people already know how to use potato peelers and what-not, why would I waste my time listening to someone on how to do it better? Plus my potato peeler works fine why do I need a fancy-smancy potato peeler anyway?"

Yeah, there probably was some luck and intestinal fortitude in going forward with her concept. I think most people would have had a negative view of her business opportunity. (A "Key" direct marketing concept here--quite often people are looking for universal approval on their ideas before they go forward, but you aren't selling "most" people. You only have to sell a very, very small percentage in order to become rich). And while I do not have documented proof that Doris' idea was panned by most I'm sure there were an ample supply of naysayers telling her it wouldn't work.

Her first Kitchen Party was profitable (she sold $175 worth of products) and it encouraged her to keep going (she signed up to do 4 other parties because of that first event). Was it lucky her first party was profitable and she signed up to do 4 other parties to boot? Or was it because she had spent a considerable amount of time preparing for that first party? Or was it because her skill set helped elevate her chances of success (remember she was a teacher, she knew how to show others how to do things).

Was it lucky it poured the night of that first party--drenching her, which probably threw her off some? How much better would she have done without being soaked from head to toe? Again was it luck that caused her to persevere or her training and preparation?

Now remember Doris had no initial thoughts of recruiting others to sell kitchen tools. That would only come later when another woman asked her if she could do the same thing. I do think some luck came into play here in the form of her husband. It was Doris' husband that pushed her into bringing aboard others. I realize many of us aren't lucky enough to have a significant other or a friend to push us into going ahead, being aggressive. I see this as a potential shortcoming for many entrepreneurs (i.e. being aggressive).

One thing to keep in mind, "The Pampered Chef" was not a huge moneymaker at the beginning. It took several years to get it to the point Doris was making a good living off of it. In 1990, Doris only had 300 (today there are 75,000) Kitchen Consultants. If you take today's sale's figures and apply them to those 300 consultants in 1990, the company was making $3,000,000 per year. A good amount but not earth shattering by any stretch of the imagination. I don't think it took a great deal of luck to grow it to $3,000,000 per year (after getting through the start-up stage).

So that leaves us with the period of super-sonic growth for the company, the 1990's.

What caused it? How much was luck involved?

Yesterday I came upon an article that appeared in Fortune Magazine in the fall of 2002, during the time the company was being purchased by Warren Buffet. And in that article it talks about a very "key" moment in the history of "The Pampered Chef".

The company was growing but not a huge amount. Doris realized that her comfort zone was holding her back (as it does most of us). She knew that for her to grow the company she would have to recruit consultants in far away places like St. Louis and Milwaukee. In her world those areas were far away from Chicago. She wasn't use to driving to those places and putting on seminars to recruit others. She wasn't use to spending nights in motels. But she did it and the company grew at an exponential rate. Is this luck or is it her just having the skills to make a good decision?

In my mind the important points of her story are:
1. Realizing what she wanted. She wanted to earn income while being at home.
2. Realizing what her skill set was. She was a teacher. She knew how to use kitchen gadgets better than most.
3. Preparing for and doing her first party.
4. Having success at her first party. At least enough for her to keep going.
5. Adding additional Kitchen Consultants through the prodding of her husband.
6. Getting out of her comfort zone and traveling to areas of the country she was not familiar with in order to spread her dream.

Where could luck factor in? #4 to a certain extent and number #5 because she married someone that pushed her to "raise her bar". But how much was #4 due to preparation and the successfully merging of her skill set with the opportunity and how much was luck? That's where the line blurs.

I asked the question at the beginning "How can we find luck similar to what Doris Christopher did?"

I think we could find our own "luck" most easily by succeeding at #4. But it's #4 that causes us the most problems. Why? Because most never get past #4. They never figure out what they want (#1). They try to create or invent skill sets instead of doing what comes naturally (#2). They either under-prepare at #3, which leads to failure or they feel they're never prepared enough and don't progress to #4.

Yeah, I think luck does come into play with the story of "The Pampered Chef" but it isn't the type of luck that couldn't be duplicated (resulting in some amount of success) by millions of others.

I'll tackle the Multiple Streams of Income comments brought up by Dien in a future post

Take care,

Mike Winicki

Mike:

I cannot answer for Dien on what he meant as luck. I can, however, mention my understanding on where I think this "luck" is in her story.

She just happened to be good with the kitchen tools.

She just happened to pick a business idea (market) that was profitable. (After all, she did no "plan" or research before hand.)

She just happened to already have teaching skills.

These certainly are all things that can be learned or discovered. But she just happened to have them all and they just happened to all fall into place nicely.

That confluence is what I think is seen as luck.

Other people would have to go out of their way to acquire/discover/learn what she already possessed.

To add to this... she had a husband who was not only supportive emotionally and in an encouraging way, he was supportive financially.

Many people are trying to start businesses while also supporting themselves. Dividing their energies.

It's like the "stars" of the "alternate" sports - BMX tricks, skateboard, etc. These "kids" are supported while they practice and get good enough to earn enough money to support themselves.

How good would we become at any skill if someone else where to support us while we devoted 8 hours a day to learning and mastering that skill?

Along these lines we have the Cheescake Woman. You know... the single mom who was living in her car who went on to open a whole chain of cheesecake stores.

A normal single mom working to support herself and child and get ahead in life, would find it hard to duplicate the other woman's success.

Single mom on welfare does not need to spend 8 hours a day at a job. She is being supported while she goes about trying her business.

The fact she was living in a car got her tremendous free press.

The single working mom would most likely not be able to get such free press. She would most likely not be able to devote 8 hours a day to prefecting her cheesecake recipe or even marketing it.

So, from her point of view, the welfare single mom had luck on her side - was being supported, happened to have a "story" which would generate loads of free press and just happened to have a killer recipe.

Again, some of this can be learned and some (press) can be created. But in her case, everything just happened to fall in to place. And everything just happened to work out while she wasn't looking for it.

I other words... success found her while she was not looking.

To those who continually strive for success, her story, and countless others just like it, appear to be based on luck.

Bill Gates' mom just happened to know the IBM boss, for example.

There are plenty such examples... IF we choose to look for them.

But why look for them? Doesn't looking for such examples simply become a means to justify why you aren't the success you desire to be? (Look, how can I ever succeed because everyone who is successful was only successful because of some blind luck and I cannot duplicate what they did.)

Instead of looking for those who, from your point of view, appear to have something you call luck, and then using it as an excuse as to why it will never happen to you, why not ask...

How can I duplicate what they did?

In the Pampered Chef case... join her company and acquire the party plan selling skills. Then try to sell other things by party plan learning the skills you get from Pampered Chef.

Or

as we have said many times on this board...

take stock of yourself. What you have available to you NOW by way of skills, resources and contacts, and ASK yourself how you can use what you already have to become a success?

After all... if you were to truly model Dorris, you would do what she did at the core... use her existing skills and jump into a business which matched those skills.

You may just find... you also become the overnight success after 15 years and then others can look at you and remark how lucky you are.

Michael Ross
There is no luck but that which we make


Discover The Great Ideas Letter

> After all... if you were to truly model
> Dorris, you would do what she did at the
> core... use her existing skills and jump
> into a business which matched those skills.

Let me repeat something from the above...

use existing skills and jump into a business which matched those skills

Now lets apply that simple concept to some well known people who would appear to have succeeded by some element of luck...

We've already covered Dorris but lets do it again anyway...

Skills/Resources: Teaching skills. Kitchen gadget skills. Supportive husband.
Business: Begins business to teach others how to use kitchen gadgets while selling them those gadgets at the same time.

Cheescake Woman...

Skills/Resources: Cheesecake recipe and ability to make it. Supported by govt. Newsworthy story.
Business: Selling cheesecakes and growth by free press of story.

Bill Gates...

Skills/Resources: Operating system. Mother knows IBM head.
Business: Selling Operating System to IBM.

Poppy King (now an unknown and bankrupt)...

Skills/Resources: Parents with contacts in the cosmetic and major retail industries. Funds from parents. Parents business skills. Lipstick idea.
Business: Sells lipstick into major retail stores.

Lindsey Fox (LinFox trucking company)...

Skills/Resources: Truck driving life style from birth. Period in time where companies bought/owned their own trucks.
Business: Independent truck drive until client needed job done which required two trucks. Later, other client desired to sell fleet and outsource.

Aristotle Onassis...

Skills/Resources: Father owned a tabacco company.
Business: Importing tobacco.

Joe Blogs (can't recall his name)...

Skills/Resources: Naturally good at art. Years spent living in beautiful mountain area and taking weekend motorbike rides to other beautiful nature regions. Supported while recoverng from motorbike accident.
Business: Painting and selling paintings of beautiful mountain and nature scenes for $15,000 per piece and up.

Warren Buffett...

Skills/Resources: Paid to learn about stockmarket investing (job). Relevent contacts due to "job". Boss was stockmarket mentor.
Business: Stock market investor.

Calvin Klien...

Skills Resources: Business partner with funds and fashion industry knowledge.
Business: Fashion.

Dean Koontz...

Skills/Resources: Naturally gifted writer. Supported by wife. Industry contacts from previously submitted works.
Business: Author.

Bill Blogs (another name I cannot recall)...

Skills Resources: Tractor companies due to job working in one. Spare parts knowledge gained as tractors needed fixing.
Business: Selling tractor parts to private individuals and companies similar to the one he worked in.

And so on and so forth...

Individually, each person's success can appear to be due to luck. They just happened to have a certain skill set at a certain point in time.

And we might look upon such people and ask "Can their success be duplicated?" Or, "Could I do what they did?"

Often, the answer to that question is NO. You could not duplicate their success and do what they have done. And certainly not within a shorter period of time.

We could say... I could be super wealthy if my mom knew the head of IBM, just like Bill Gates. Or, I could have a successful kitchen gadget business if I had skills with teaching, gadgets and someone to support me.

But think about this...

could the gadget lady think the same thing about Bill Gates? And couldn't Bill Gates also think the same thing about the gadget lady? (Not would he... could he.)

When you think about it this way... Bill Gates would not be able to duplicate what the gadget lady did, she wouldn't be able to duplicate what he did, and none of the people used as examples above would be able to duplicate what the others did.

And the reason is because each person used the available skills/resources they had to start their chosen businesses.

So while they may appear to be "lucky" from a certain point of view... from another point of view all they did was use what they already had to the best of their advantage.

Does that mean you can only be successful by using what you currently have right now this moment?

Good heavens no. There was a point in time when Bill Gates did not have an operating system to sell. At that point... his mother's "relationship" with IBM had no immediate value to him.

Sometimes... the element you need is yet to appear, for some reason. And while it takes its time to arrive you can always learn new skills and acquire new resources.

You may have a certain set of skills and resources. And to start a business all you need is one more resource... or idea... that magically puts all the pieces of the puzzle in to place for you. And that idea might simply point something out to you that you had never thought about before.

And sometimes an idea may lead us to acquire a new set of skills/resources we otherwise wouldn't have had. And if those new skills/resources are then used in a business, others will look on and once again see that the person seemed to already possess those skills before starting the business.

Of course, there are also businesses which can be started by anyone without needing to spend years acquiring new skills, or without needing previously established contacts. And those kinds of ideas are what we try to cover in The Great Ideas Letter - ideas anyone can start.

Michael Ross


Discover The Great Ideas Letter