How To Be Lucky (By Design)

Todd Henry [00:00:02]:

In 1982, a 29 year old advertising executive named Gary Dahl walked into a client meeting with what seemed like a joke. He held up a small cardboard box poked with air holes, and inside was a rock nestled on a bed of straw. On the outside, the box said pet Rock. The care and feeding of your pet rock. It was ridiculous. I mean, it was satire and it was a multimillion dollar idea. When the pet rock hit store shelves that year, it became an instant cultural phenomenon. Dahl sold over a million of them in just a few months, and he was heralded in magazines as one of the luckiest entrepreneurs in America.

Todd Henry [00:00:44]:

But here's the thing. Gary Dahl wasn't lucky. He was ready. For years before that moment, he'd been studying consumer behavior, watching trends in humor and novelty, and noticing how people would spend money on things that made them laugh or feel clever. When he came up with the pet rock, it wasn't just a random stroke of genius. It was the collision of observation, timing, and preparation. He had the copywriting skills to make it funny, the design instincts to make it appealing, and the awareness to show that it was absurd enough to go viral before viral was even a thing. Luck smiled on him.

Todd Henry [00:01:21]:

Yeah, but only because he had his eyes open when opportunity winked. That's the essence of what we're going to talk about today. Our guest, Jud Kessler, calls this being lucky by design, which is the title of his new book. His research at the Wharton School uncovers how what we call luck is often the visible residue of invisible systems. The rules, incentives, and hidden markets that determine who gets what. From concert tickets to job offers to clients, from viral hits to creative breakthroughs, much of what looks like luck is actually the result of understanding how the system works, positioning yourself to take advantage of it when the moment comes. So in our conversation, Judd and I are going to explore how to decode these hidden markets. How to signal your value in a choose me environment like hiring or client work, and how to spot the real opportunities that are disguised as randomness.

Todd Henry [00:02:16]:

We also talk about the coming wave of AI driven efficiency, how friction, the thing we often try to remove, might actually be what makes our work human and valuable. So whether you're an artist trying to get noticed, a leader trying to attract the right people, or just someone who wants to stop leaving opportunity to chance, this episode is for you. Because as Gary Dahl and countless lucky creatives have proven, luck doesn't strike the unprepared. It visits those who have already built a door for it to knock on. This is Daily Creative Since 2005, we've served up weekly tips to help you be brave, focused, and brilliant every day. My name is Todd Henry. Welcome to the show.

Judd Kessler [00:03:04]:

So I'm an economist. Economists love markets. We think about markets as kind of central to how stuff gets allocated in society. Who gets what? What economists like me teach in our classes is that prices are what help decide who gets what. So if you've ever heard an economist say supply equals demand, that's actually a statement about price is going to be the thing that determines who get.

Todd Henry [00:03:29]:

That's Jud Kessler, Wharton Business School professor and author of the new book Lucky by Design. He argues that there are other factors that affect things like purchasing decisions or even career or creative success that are less obvious to the naked eye.

Judd Kessler [00:03:43]:

It turns out that there's a lot of markets, which I call hidden markets in my book that allocate things, and it's not based on price. Price might be involved, like if you're buying a ticket for Taylor Swift's ERAS tour or tonight we're going to the US Open, and I had to buy a ticket through Ticketmaster for that. But the price that I paid, it was not the central thing that allocated the seats in the ERAS Tour or to the US Open. It's first come, first serve, whoever clicks the fastest for the tickets. Taylor Swift ERAS Tour, they used a lottery to decide which of the verified fans would get the tickets. And these hidden markets, they're operating in the background. And so when you see that your friend got tickets and you didn't or you really wanted new hot product that a bunch of your friends have and you can't figure out how to get it, we often look at these markets and we think, oh, this is just luck. These folks got lucky and I didn't.

Judd Kessler [00:04:41]:

But it turns out that there are rules that determine who gets what in these hidden markets. And if you understand the rules and understand the strategy to play, you can get lucky by design. You can get the stuff that you see other people getting, you think by chance.

Todd Henry [00:04:56]:

Well, I want to talk about the rules. You talk about the three E's.

Todd Henry [00:04:59]:

Can you describe the three E's as.

Todd Henry [00:05:01]:

Kind of that foundational framework for evaluating these hidden market rules?

Judd Kessler [00:05:04]:

Yeah. So three E's are efficiency, equity, and ease for market participants. And these are things that hidden markets, the platonic ideal of a hidden market, would achieve all of those efficiency, meaning we would get the scarce resource to the people who value it the most. So the people who are the real diehard Taylor Swift fans, those Swifties they should be the ones who are ending up with tickets. Equity is about fairness. So, you know, one of the things we might worry about is, you know, if there are people that are look very similar, so we both kind of are equally excited about going to the US Open, we should have an equal chance of being able to get those tickets. And then ease is about the ordeal that is involved in actually getting what it is that you want. So if I have to wait in line for 12 hours and sleep on the street in order to get a new product that's being released today, that is not easy.

Judd Kessler [00:06:02]:

And that is something that we should be kind of accounting for. The ideal hidden market would be efficient, be equitable, and be easy for market participants. It turns out that there's no guarantee that you'll be able to get all of those in a set of allocation rules in a hidden market. And so a lot of times markets leave a bit to be desired in terms of not achieving those goals. But of course, the fact that they don't achieve those goals is what creates the opportunity for strategies to succeed where others fail.

Todd Henry [00:06:36]:

You know, as Jeb is explaining the three E's, efficiency, equity, and ease, I couldn't help but think about how perfectly they describe the invisible rules of creative opportunity. Whether you're a designer trying to land a client, a writer pitching to a publisher, or a leader angling for that next promotion, the same dynamics are at play. Let's start with efficiency. In economic terms, efficiency is about getting resources to the people who will make the most of them. Like getting the Taylor Swift tickets to the true Swifties, as Judd says. But in creative work, efficiency means showing that you can turn opportunity into value. It's proving that if somebody bets on you with their time, their budget, their trust, that you're going to turn that investment into. Into something remarkable, and you're going to do it efficiently.

Todd Henry [00:07:22]:

A lot of creative pros make the mistake of thinking that talent alone earns opportunity. But what people really want to know is, if I give you this project, will you deliver? That's efficiency. Now let's move on to the second E. Equity. In creative fields, equity often means playing the long game. It's not just about being good at your craft. It's about being good to work with you. Build equity.

Todd Henry [00:07:46]:

When you treat clients, collaborators, and competitors with respect, when you consistently show up as someone who gives more than they take, it brings new opportunities. Because people love to recommend and rehire those who make them look smart for doing so. And finally, there's ease. Now, this One might be the secret sauce. Ease is about removing friction. It's what Judd calls ordeal cost. In creative work, the easiest person to work with often wins. Now, that doesn't mean you compromise your standards or bend over backwards.

Todd Henry [00:08:18]:

It means that you know how to make a collaboration feel smooth and enjoyable. You make people's lives easier. When you combine those three, efficiency, equity, and ease, what happens is that luck starts to find you. You become the first person everyone wants on the project, the one that clients call first, the one who gets promoted because leadership already trusts that things will go better with you. Invol. So if you want to become lucky by design in your creative career, don't chase luck. Design for it. Build a reputation for results, earn trust through fairness, and remove friction wherever you can.

Todd Henry [00:08:56]:

Because in the hidden markets of opportunities, those are the currencies that actually matter. So let's get back to the interview.

Todd Henry [00:09:08]:

You referenced your mentor, Nobel laureate Alvin Roth, who I think first taught you about the concept of market design. Right. The idea that markets can be designed, that we can actually work these markets to our advantage. So can you share with us a little bit about how that works? And also how might that apply to a leader of an organization or somebody who's trying to, you know, maybe we're trying to chase after a specific client. We're like, oh, that company is so lucky. They always get all the good clients. Right. Well, you know, so can you talk us through that?

Judd Kessler [00:09:39]:

Yeah. So market design is the subfield of economics that, you know, a lot of what I'm talking about is based in. This is this idea of allocating things without prices and having some other set of rules that does it. Market design kind of tells us what are the market rules that we should be thinking about. So Al Roth, my advisor, who ended up winning a Nobel Prize for this stuff, he was very big on helping institutions set up markets where the strategy is easy, where all you have to do is rank your preferences honestly. So when I picked kindergartens for my son, the first time I was in the market for elementary school admissions, I was invited to rank 12 schools because the mechanism that they used was designed by Al and some of his co authors. It was very easy. I just ranked them in the order of my preference.

Judd Kessler [00:10:28]:

I had to be sure to include the school that my son had priority at as one of the 12 so that I could lock that in as a safety school. But it was a very easy market to operate in. If every market was designed by Al, it would be very easy for us to go around and Rank our preferences. But a lot of markets are not. Some of the markets like you just described, the market for clients, or I think about labor markets more broadly. Those are what I call choose me markets. There is this game that is being played where I have to go out and try to get a client or get a job. If I'm a worker looking for some stable relationship with the firm, they have to assess me and decide whether I'm the right person for that job or for that contract.

Judd Kessler [00:11:10]:

That is a game that has a different structure. It's kind of like a signaling game where I want to reveal things to you about my ability to perform. But I also need you to know that if you were to pursue something with me, I would be very invested in this particular relationship. So this is something that in labor markets we worry about a lot. But I think would also apply to kind of contract work where if a firm is worried that all I'm interested in is securing the job or getting the contract, but I'm not actually going to be invested in the long term, then they might be less keen on pursuing something with me. They might choose somebody else over me. And so one of the signals that we send in these markets is about our interest, not just in getting the job or securing the contract, but sticking around for a long term.

Todd Henry [00:11:55]:

So what are some other strategies that we can employ to help us? I don't want to say take advantage of these hidden markets, but maybe win in these hidden markets.

Judd Kessler [00:12:05]:

Yeah, so no, it's definitely about winning. We're doing the best we can, following the rules. So we never. There's a lot of bending the rules or looking for loopholes, but never breaking a rule that's there. The way I like to think about it is there's some set of market rules. And whatever that set of rules is, implies a set of strategies. So there is a class of markets where what matters is speed. If it's a first come first serve race where the first person to click on a reservation slot gets it, or a first come first serve waiting list where you know if you're at the top of the list, you'll be the first to be called, then the strategy is being fast and being faster than other people, knowing that a race is happening.

Judd Kessler [00:12:40]:

So kind of being ready to go. And if you know firm's going to take being quick as an indication that you're really motivated to take a job with them or to represent them, then it behooves you to be fast to respond to their. So that's one Class. So when you see that there's going to be a speed component, you kind of put on your, Here are my speed strategy hats. If it's a random allocation, so a lot of allocations operate by lottery, then you kind of, you might think, oh, it's by lottery. What chance do I have to increase my luck there? But actually a lot of allocations that are based on random lottery give you some scope for entering multiple times. So you can either enter, you know, yourself. So trying to get tickets to go to Shakespeare in the park with my wife and I can enter for two tickets for the show, but my wife can also enter for two tickets for the show.

Judd Kessler [00:13:32]:

And so if we both enter on a day, I call this strategy double dipping, then we both, you know, we double our chances of winning and there is a very slim chance we'll both win and then we'll have two lucky friends that get to come with us. But you know, you could also invite your friends to enter the lottery as well, and then maybe they'll win for you today and even if they can't go, maybe they'll pick up the tickets and hand them over to you. And so there's strategies like that that are kind of, as you think about the rules, you can think about what strategies you want to play. Then there are more broad strategies that apply in a lot of markets. And one of them is one in the book I call settling for silver, where silver would be a silver medal, as opposed to, say, going for gold, which would be going kind of for the, for the top prize. And this strategy, it's kind of, it's a little disappointing to have to play the strategy, but it's often the right one, which is to pretend that something that is not your true first choice is at the top of your list. So acting as if something that it's not your absolute favorite, but it's something you would be very happy with in a lot of markets when there's a lot of demand and you're competing against other people, sometimes by going for something a little bit less desirable, you face a lot less competition. So when everybody else is trying to get the perfect 7:30pm reservation at a hot restaurant, you go in and you ask for five o', clock, you actually might get it.

Judd Kessler [00:14:52]:

Even though it's not your first choice, you might end up getting a reservation. Whereas the people who were trying to get 7:30, when they turn around and then try to get 5 o', clock, it's already been taken by people like you settling for silver. But those Reservations can be something you can win if you are willing to play that. Settle for silver. Strategy.

Todd Henry [00:15:10]:

You mentioned speed as a strategy. I do a number of speaking events every year, and I have a lot of friends who do a number of speaking events every year. And what's interesting is I've discovered over time that I have peers who like to position themselves as untouchable, sort of, you know, like they put a wall of people between them and any prospective client. That's sort of the way that they, you know, because their belief is, oh, I want to be seen as valuable and sort of untouchable. Whereas my posture is if somebody emails about a speaking event, I want to get back to them right away and try to get them on a call.

Todd Henry [00:15:45]:

As quickly as possible.

Todd Henry [00:15:46]:

Because what I've discovered is that most event planners, they're not concerned about the aura around you or how big. What they're concerned about is reducing friction. They want to limit friction as much as possible. And so if I can say, hey, let's do a call this afternoon, and they just emailed me this morning, that shows, hey, I'm going to be easy to work with, whatever. It's not because I'm big, it's because I'm just reducing friction. I've identified the thing that is the key to making myself lucky by design.

Judd Kessler [00:16:15]:

That's. It's a great example. It's phenomenal way of thinking about it. Because when I think about that market as. There's two things that you're trying to signal. One is that you're trying to signal that you would be worth having, that you're good enough to be invited, say, to give the speaking gig. And then the second thing is that if they pursue something with you, you said reducing friction, but just being easy to work with and not canceling at the last minute. Right.

Judd Kessler [00:16:39]:

People who are so high in demand, maybe a better offer will come along and you'll leave them in the lurch. So you. Once they've reached out to you, it's kind of you're recognizing, like, oh, I've already cleared the bar, where I have to worry about them thinking, I'm good enough. Now. What I need to signal is that I'm actually going to be easy to work with. I'm not going to bail at the last minute. I'm going to reduce friction, as you say. And so understanding that, you know, both of those things are something that you need to signal in markets like this is essential.

Judd Kessler [00:17:10]:

And then figuring out exactly how to signal it, you know, and responding right Away is a good way to do that.

Todd Henry [00:17:15]:

So I want to talk about that subject of friction. Part of the reason I brought up that example, because I do feel like markets work really well when there is like. I know we talk a lot about efficiency in markets, right. But there's always some friction in markets and the friction is what slows things down enough or makes it difficult enough that there's actually value created in the market and when you completely remove the friction. So for example, if something is instantaneous, how valuable is it? If something is instantaneous and cheap and there's no friction. Right. How valuable is it? So with the advent of AI LLMs thinking is cheap, ideas are cheap. That used to be a point of friction.

Todd Henry [00:17:54]:

I spent a big chunk of my.

Todd Henry [00:17:55]:

Early career helping people generate ideas because that was a point of friction. Let's get to the ideas quicker. Now we all have 500 potentially viable ideas at a prompt's distance away. How do you perceive that impacting our approach to some of these invisible markets when we remove the friction from it, when all of our agents are competing on speed to try to get there faster than we can get there?

Judd Kessler [00:18:20]:

Yeah. So there's two things I want to say based on that question. One of the things I talk about in the book is, you know, what happens when you're competing with bots that are going to go faster than you, for example. Yeah, the first thing about what happens when we reduce friction in general, one of the things that happens in these markets, I call them choose me markets in the book, but the two sided markets where you're trying to get a job as a speaker and a speaking agent is trying to hire you. The game that you're playing of signaling that you're motivated and interested when it is basically free to send text based responses very quickly and they look phenomenally polished, then all of a sudden that ability to signal like, I'm really motivated because look, I wrote you this long detailed response about what I'm going to talk about and how good I'm going to be that starts to lose its luster. It no longer signals that you actually care and are motivated because, you know, it probably was generated by AI and it's probably obvious that it was generated by AI and this is, you know, across the board. So I think about this a lot with like cover letters for resumes. So I've been hiring research assistants for 15 years and I would say all of the best cover letters I've gotten have come in the last few months.

Judd Kessler [00:19:34]:

All the ones that talk about how interested they are in my research and how they're citing specific stuff in my papers. And it could be that some of these are legitimately. I thought about it for three hours and I read your academic work and I saw how it connects to my desire to work for you. But it's hard to imagine that all of them are. And so it's one of these things where the AI for all of its benefits has made it very easy to appear as though you are more engaged and more interested. And that's going to make it harder in these markets to try to identify who is actually the right person for this job or the speaking gig. And so that's going to require more other signals that are not reproducible by AI. It's going to require word of mouth references.

Judd Kessler [00:20:18]:

It's going to require networking with people who work at an existing firm. For me, it might mean taking my class and showing me that you're motivated before you apply to be an ra. And so that's something that AI is doing. It's kind of changing what works as a signal in these markets. What we're trying to communicate with each other about our interests. Second thing I want to say is about the speed, because this is like a real. This has been a problem for a long time. It predated AI, but it's going to get worse, which is in markets that allocate things in first come, first serve races, like tickets to live events, like spots in my kids after school programs at elementary school for restaurant reservations.

Judd Kessler [00:21:01]:

More and more we're seeing that computerized programs are the ones that are actually snagging all of the best tickets, all the best reservations, all the best spots that are released in this way. And as more people are able to kind of program code that will go and do that for them, it's going to make the problem even worse. We're going to end up having to move away from first come, first serve allocations because it's just going to end up rewarding people who've programmed the fastest AIs or programmed the fastest bots. We're going to end up seeing more lottery based systems or other systems that do not rely on just being the fastest because it no longer signals that you care most about the item. It's no longer achieving efficiency to give out to people who are the fastest, because being fast will no longer be linked to how much you value the thing, but just linked to whether you have AI helping you or not.

Todd Henry [00:21:59]:

What I love about Judd's perspective is that it reminds us that luck isn't some mysterious force floating around waiting to pick its next favorite. It's often the natural byproduct of paying attention, of understanding the systems we're part of and aligning our actions with how those systems actually work. The people we call lucky are often just the ones who have done their homework. They know the rules, they notice the patterns, and they prepare for the moments that other people dismiss as chance. For creative pros, that means being intentional about how we show up in the hidden markets of our world, whether that's the job market, the client market, or even the attention market. It means asking, what are the signals that matter here? How can I make it easy for others to say yes? How can I design my own luck? By showing up prepared, consistently and with integrity. So if there's a takeaway from this conversation, it's that luck isn't found. It's built.

Todd Henry [00:22:54]:

It's engineered through discipline, relationships and awareness. So as you head into your next big opportunity, that pitch, that interview, that creative leap, remember that luck doesn't just happen to you. It happens through you. When you've done the quiet, unseen work of preparation. You can learn more about Judd Kessler and his book Lucky by design@juddbkessler.com or wherever you get your books. And you can hear our full interview for free@dailycreativeplus.com and as always, if this conversation sparks something for you, share it with a friend or a teammate who's been waiting for their lucky break. Maybe what they really need is a reminder that their preparation might already be creating it. Thanks again for listening.

Todd Henry [00:23:38]:

My name is Todd Henry. You can find my books, my speaking events, and more@toddhenry.com until next time, stay brave, focused and brilliant. We'll see you then.