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The absurd odds of a perfect bracket, you ask? Something like one in 9.2 quintillion. Heck, we have a much better chance of finding the stock market’s next 100-bagger than perfecting college basketball’s “bracketology.”

Today, we'll discuss serendipity in business and how many of the great companies (and ideas) stem from chance encounters.

All this, and more, in just 4 minutes to read.

— Matthew

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Trivia

Serendipity in Business

Hanging by a thread

Sure, you can chalk up a business’s success to big plans, brilliant ideas, and excellent execution—usually, those go a long way. But much of business (and life) comes down to serendipity—essentially, being in the right place at the right time. As Morgan Housel wrote in his bestseller Same As Ever, the world is “hanging by a thread”—it’s sensitive to tiny, random events that we can’t control or see coming. 

“There’ll always be serendipity involved in discovery,” Jeff Bezos once said. 

Here are a few examples and stories of serendipity’s power in business.

Netflix and chill

It’s 1997, amid the dot-com boom, and Reed Hastings wants to rent Apollo 13, the 1995 film about an abandoned mission to the Moon. But after he saw the movie, he forgot to return it to Blockbuster, the dominant force in movie renting with over 9,000 stores and over $6 billion in annual revenues at its peak. 

Because Hastings forgot to return the movie, he incurred $1-per-day late fees. When Hastings eventually returned the film, Blockbuster hit him with a $40 charge. (Blockbuster penalized customers, racking up around $800 million annually on late fees alone.) That got him thinking: Why does it have to be this way? In a car ride with his friend Marc Randolph, Hastings recalls thinking, “What if we build a business on the premise of zero late fees?”

At the time, VHS (video home system) tape rentals defined the industry, but Hastings and Randolph also felt they could disrupt it by creating a subscription-based DVD rental service. Soon, Netflix was born. Randolph’s mother helped fund their project with an initial $25,000 investment, and they launched the mail-order service, delivering DVDs to subscribers until 2007, when streaming became available.  

A few years later, Hastings and Randolph recognized how difficult disruption can be, so they pitched Blockbuster to buy their company for $50 million. Blockbuster executives stared blankly at them and quickly said no. “Now, we’re going to have to kick their ass,” Randolph recalled thinking afterward. 

Today, Netflix is a $262 billion company, at least slightly because of Blockbuster’s infamous rejection — and a bunch of late fees. 

Staying caffeinated

Forty-one years ago, in 1983, Starbucks sent its promising, young director of retail operations and marketing to attend a conference in Milan, Italy. Little did he know, this trip would shape the future of the ionic coffee company and set him on a path to becoming a billionaire. 

During the conference, Schultz wanted something a little different, something fresh, so he walked around the city to check out cafes. He wanted to understand European coffee culture, specifically Italian coffee culture. What he noticed was quite foreign to American coffee drinkers: Italians weren’t at cafes just to drink coffee and get back to work. They often stayed in cafes for conversations, reading, relaxing, and enjoying downtime to think. 

Schultz was also captivated by the bustling espresso bars that dotted the city’s streets. It wasn’t just about the beverage; it was about the communal experience, the art of conversation, and the sense of community that permeated these establishments. Baristas were highly trained and professional, with a “real sense of pride and integrity,” Schultz has said. “The barista gets to know the customer. I thought, ‘Wow, could we create that in America?”

Schultz later wrote that this realization moved him deeply, fundamentally altering how he viewed Starbucks's future. As he recalled in his 1999 memoir, his wandering around Milan gave him many ideas. “It was like an epiphany,” he wrote. “It was so immediate and physical that I was shaking.”

Inspired, Schultz returned to the U.S. with a newfound vision for Starbucks. He envisioned more than just a place to grab a quick cup of coffee on the go. He saw an opportunity to recreate the Italian coffeehouse culture — a space where people could linger, connect, and savor their coffee.

Schultz got his great ideas by stepping outside the conference. He learned about the importance of ambiance, community, and the emotional connection that a cup of coffee can foster—principles that continue to drive Starbucks’ success, making it far more than a coffee company but a cultural phenomenon. 

“I was writing notes on the airplane, sketching out a store, knowing instinctively that the opportunity to recreate this in America was right there,” Schultz said. “I was exposed to something that completely lit a fuse inside me.”

A pharmacist’s discovery

A serendipitous alchemy was about to unfold in the quiet, dimly lit corner of a humble pharmacy in Atlanta, nestled amid rows of glass bottles and apothecary jars. In this unassuming setting, Coca-Cola's inception began, woven with threads of chance and innovation.

It was 1886 when Dr. John Stith Pemberton, a pharmacist with a penchant for experimentation, embarked on a quest to concoct a refreshing tonic. Little did he know that his quest would birth one of the world's most beloved beverages (and a Warren Buffett favorite).

Fueled by curiosity and a desire to craft a tonic that would enrapture the senses, Dr. Pemberton blended a fusion of botanical extracts, herbs, and spices. Then, in a moment of happenstance, fate intervened. In his pursuit of a perfect concoction, Dr. Pemberton inadvertently added a syrupy amalgamation to his bubbling elixir. With a deft hand and keen eye, he sampled the mixture, unaware of its magic.

As he sipped the velvety liquid, many flavors unfolded, igniting his senses with unparalleled delight. In that instant, the iconic taste of Coca-Cola was born.

Dr. Pemberton had stumbled upon a potion that would transcend borders and cultures. From the humble confines of Dr. Pemberton's pharmacy, Coca-Cola emerged, a testament to the power of innovation and the allure of happenstance. Its journey is a testament to the serendipitous dance of science, artistry, and the enduring magic of discovery.

Other examples

Post-it note: A 3M scientist tried to build a strong adhesive but failed. Instead, he ended up with a weaker, reusable one. Similarly, Swiss engineer George de Mestral noticed burrs sticking to his dog’s fur during a walk in the woods, prompting him to invent Velcro. 

Google: Larry Page and Sergey Brin met by chance at Stanford University while pursuing their graduate studies, despite differing academic backgrounds. They bonded over technology, a serendipitous encounter that laid the foundation for one of the world’s most influential companies. 

Slack: The workplace communication platform emerged from a failed video game project called Glitch, which didn’t gain traction. But the internal communication tool they had developed for the game proved more valuable. 

Airbnb: Founders Brian Chesky and Joe Gebbia struggled to pay rent in San Francisco. However, with a major conference coming to town and hotel rooms in short supply, they saw an opportunity to rent mattresses in their apartment. 

FedEx: Founder Fred Smith drafted the idea while writing a term paper at Yale University. The paper outlined a concept for overnight delivery service inspired by the growing demand for rapid transportation of goods. His idea revolutionized the industry. His grade on the paper: “C.”

KFC: Colonel Harland Sanders founded KFC at age 40. In 1930, he opened a roadside motel in Corbin, Kentucky, where he began serving his legendary Southern-style chicken to weary travelers. This decision was born out of necessity, as the Great Depression had left him financially destitute. Sanders transformed a roadside motel into the cornerstone of a global empire. KFC’s success is a testament to Sanders' resilience, ingenuity, and the serendipitous alignment of circumstances.

Final thoughts

As these stories illustrate, staying open to unexpected possibilities can lead to remarkable outcomes. Innovation often unfolds in unscripted, unplanned moments.

Jeff Bezos understood the concept deeply, leaving room for serendipity as he built Amazon into one of the most revolutionary companies in American history. He recognized that some of the most profound breakthroughs come not from rigid plans and brainstorming but from space to explore, imagine, and stumble upon unexpected paths. 

Dive deeper

You can read Harvard Business Review’s piece on serendipity in organizations or watch a Ted Talk on its power for entrepreneurial thinking.

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See you next time!

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