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At the end of each episode of my favorite podcast, How I Built This, host
Guy Raz asks his guests, all of whom have built massively successful
businesses, “How much of your success is because of your hard work,
skills, and smarts, and how much of it is luck?” A number of the
talented entrepreneurs inevitably admit that luck played a role. And
after 2020 gave certain industries pandemic wedgies (travel) and others golden tickets (home improvement), that question is more relevant than ever.
The lucky ones
Zoom: The
fact that I’m having trouble coming up with a WFH joke right now shows
just how many stories we’ve written about Zoom since March. The
videoconferencing company wouldn’t trade a holographic Charizard for the
year it’s had, all thanks to the “good luck” of the pandemic forcing
tens of millions of people to set up home-offices in their pantries.
Zoom’s revenue was up 367% from a year ago in Q3; its stock is up nearly
600% this year alone.
Peloton: Another company that hit the lotto while being struck by lightning, Peloton has wheeled its hardware (bikes, treadmills) into a lot more households this year thanks to the pandemic.
- On June 30, the number of people subscribing to its remote fitness classes reached ~1.1 million, up from 886,100 at the end of March.
And while
many companies struggled to keep the lights on in their unused offices,
Peloton’s biggest challenge was making enough bikes to deliver to
impatient customers.
Fiverr: An under-the-radar pandemic winner, Fiverr is a marketplace for remote freelancers. Its Service-as-a-Product offering is tailor-made for a business landscape where part-time remote workers are in heavy demand.
Novavax:
Talk about a business that is booming. The small biotech started the
year essentially as a penny stock. It had no FDA-approved drugs and no
profits. But once the coronavirus hit and Novavax announced it had a
vaccine candidate in development, the stock went ballistic. It’s up
*checks notes, rubs eyes, mutters “Oh, wow”* over 2,700% this year.
But as any tipsy trip to the roulette table can tell you, luck is a double-edged sword.
The pandemic has put Zoom in an awkward position, according to Packy McCormick, writer of the Not Boring
newsletter: “Zoom’s attracted a ton of competitors and they’ve been
forced to focus on security and reliability versus building anything
new.” Revenue is way up, but that growth spurt may have come at the
expense of a more sustainable trajectory that would put it in a better
position over the long-run. “Yes [Zoom] has been lucky, but in some
cases, is it too much of a good thing?” McCormick told me.
Peloton’s ankles are also showing after it outgrew its 2019 pants. Record sales have exposed cracks in its supply chain, and it recently had to issue a recall on 27,000 pedals because of a safety risk.
Still, growing pains are good, because it means you’re...growing.
The raw end of the deal
For every
Peloton and Zoom, there were thousands of small businesses forced to
close despite having thriving operations before the pandemic.
Because of
the nature of the lockdowns, restaurants have been particularly unlucky.
Data from the U.S. Chamber of Commerce shows that 82% of jobs lost
since February have been in the service industry. And in California, one of a few states to ban indoor dining two separate times, the National Restaurant Association predicts 43% of restaurants will permanently close because of the current crisis.
But even on a restaurant-by-restaurant basis, some were unluckier than others.
- The Fat Radish, an upscale NYC eatery, was forced to close in July because it didn’t have the street space to take advantage of outdoor dining.
- But at Loulou Petit
Bistro, just one neighborhood away, “We are lucky to have a large
outdoor section with close to 80 seats and...dedicated heaters,” owner
Mathias Van Leyden told Time Out.
Business
survival didn’t come down to great food, superior ambiance, or servers
who memorize your order without writing it down. Sometimes, it was
determined simply by whether your location could accommodate outdoor
dining.
Look to the cookie
As easy as
it would be to fit businesses neatly into the categories of “lucky” or
“unlucky” during the pandemic, the reality for most companies isn’t as
black and white as the Seinfeld cookie.
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Take Disney: Its parks business, which accounts for 23% of its revenue, was devastated this year. It took an $81 million operating loss in FY 2020 after netting $6.8 billion in profit in FY 2019.
But Baby Yoda, Hamilton,
and “Let It Go” saved the day. Disney would be in a (small) world of
hurt right now had it not launched Disney+ five months before the
pandemic. And Disney+ might not have gotten an astonishing 86 million
subscribers if parents hadn’t been stuck at home with bored kids. But
those things happened because of Disney’s foresight to launch a
competitor to Netflix loaded with its own great IP, plus a lot of luck.
Now, after telling the world it’s all-in on streaming during its most recent investor day, Disney’s stock is at an all time high. And Baby Yoda could likely run for president.
Bottom line:
After 2020, I'm guessing a lot more guests on Guy Raz's show will give
additional weight to the role of luck. Blood, sweat, tears, and even
genius were no match for simply being in the right—or wrong—place at the
right time.
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And now, a stunning New York Times report suggests he was right.
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