Introduction

The wisdom I heard most this year is to maximise one’s serendipity surface. The idea is to increase the likelihood of encountering unforeseen opportunities by engaging in diverse experiences, networking with a wide range of people, and maintaining an open-minded and curious attitude towards life’s possibilities.

This makes so much sense, especially when you hear about it the first time. However, despite having a huge potential, it is not a general principle when I think more about it. There are some special situations where this rule doesn’t apply, and there are situations that the derivative of this rule could suggest the opposite actions.

Networking

Networking is the textbook example where the luck surface rule applies. The implementation of the rule is more nuanced than the rule itself.

As an off-the-chart introvert who physically rejects alcohol and small talks, I find most networking events, which put people in the same room and ask the participants to mingle and socialise, to be particularly challenging and draining, often leaving me feeling out of place and disconnected. Initially I thought it might be to do with experience but it didn’t end up improving much. It doesn’t take a genius to realise that I am not going to get much serendipity attending networking events the way I am doing it.

What I did find helpful was to have one on one catch-ups with weak connections where we have had associations through a focused event or platform with a purpose, for example, guest lectures, sharing due diligence or cap tables on start-ups, or common interests through discovery of personal blogs etc. This type of networking tends to have significantly higher match rate, greater mutual benefits, and larger propensities for ongoing relationships. I will be doing more of it next year with a few variations.

The key lesson for me is, implementation could be as important as, if not more important, than the rule itself.

Branding

This year I did a lot of travelling, from Banjo Paterson’s home town Orange to King Charlie’s high school city Geelong, from New York, the concrete jungle where dreams are made of to Silicon Valley, the epicenter of technological innovation and entrepreneurship, from Georgia Tech to Stanford. The journey is supposed to add the width and colour to my life. However, when looking back, it gives rises to something different.

When walking on the streets of Manhattan, passing through Stanford’s buildings made of Stanford Yellowstone, shouting ‘Go Jackets’ in Georgia Tech’s graduation ceremony, a feeling is arising: those places are nothing without the people drawn to them. The value of those places is a function of how appealing they are to the people, the best people.

Back to the luck surface itself, contrary to umbrella where a larger surface passively increases the amount of rains the surface interact with, the luck surface has two significant dimensions: size and magnetism. Those two are not mutually exclusive. Magnetism is like product market fit where it is generally achieved on a small size of audience first, aka early adopters, before mainstream adoption.

To certain extent, to build a quality luck surface, we need a good product with clear messaging to the target audience first. The product is ourselves, and the messaging is our brand positioning in front of the audience we mostly want to get exposures to. A brand can be built through relationships for the networkers, or can be built based on mutual benefits through the use of product led growth.

Branding might be a necessity if one is serious about increasing the luck surface.

The Other Side of Serendipity

Is it all about maximising the luck surface? Not really. As I grow older, more people are missing from my life, and sometimes their own life. I watched a movie called Endless Journey (三大队) which told a story of a star police squad chasing a sneaky criminal over decades. It is worth noting that the entire squad went from police stars into criminals overnight, for misusing forces when interrogating suspects. Those people lost their careers or even life meanings permanently.

If we look at life, it is a scary one way journey with many single points of failures. One strike, we could be out once for all.

The derivative of maximising the (good) luck surface, is to minimise the (bad) luck surface.

Leaving toxic environments, distancing overbearing individuals, moving away from low value tasks are all no brainers linked to this derivative rule.

There is a less obvious but significant category of decisions that could easily increase bad luck surface by many folds - using non customer centric services. This sounds a bit hard to tell - how to spot non customer centric providers beforehand? It is never 100% but having ‘low cost’ as the main competitive advantage seems to be a reliable indicator. When there is dispute, they can’t lose because the margin on individual transactions are too thin to swallow the costs of goodwill for customers. Their staff is likely to be rude. The non-monetary costs are prohibitively high, including the likes of long wait, no service, drama etc. It takes just one blow for you to lose all the benefits of saving on quality services, and it is likely going to have outsized emotional impacts on you, which makes it all not worthwhile.

Where Resources are Limited

There is indeed one area where the luck surface rule is misused, and that’s investment, especially in the context of start-ups. I’ve written numerous times that power law does not matter when one is taking a portfolio approach, as the portfolio return dependents on the quality of the underlying distribution more than having outliers or not, especially when the size of the portfolio is large.

This time I will not explain it mathematically. Instead, I would say, when one is increasing the ‘luck surface’ of catching unicorns by simply making more investments, especially when dipping into sub-par companies, it is effectively taking capital away from existing companies which could well turn into unicorns, into companies that are much less likely to be unicorns, based on the assumption that there are values of investment selections (if not, VCs don’t deserve to have a job).

Simply put, investment are one fixed size cake - there is no value of increasing the surface for the sake of it. Instead, active managers’ job is to make the best possible bets. Leave diversification to the asset allocators, because when active managers do it, it is diworsification.

Conclusion

The world is not easy. Even if we have a luck surface rule as close as an universal rule, the implementation of it plays an vital role on its success or failure. ‘Idea guys’ just have to work a bit harder. Not to mention that it is not generally application in every area, especially on areas like investment where resources are strictly limited. Using it in the wrong area unfortunately leads to sub-optimal outcome.

Use it wisely, and join the ride for the upside.