In high-risk careers such as music, art, sports, investing, and entrepreneurship, we see one-hit wonders, or more broadly: those who have a meteoric rise, then a silent return to obscurity.
In my experience witnessing such sudden success/failure combos, I’ve observed the following counter-intuitive result:
Observation 1: the person who experienced this combo is oftentimes more miserable than the same person prior to the meteoric success.
Some examples I have personally witnessed:
Someone who has been privileged and old-money for decades before losing it all.
Someone who tasted massive and quick startup success failing at the second and third companies.
Someone who made an ungodly amount of money from crypto as a VC and losing it all.
Someone who rose to fame briefly as a singer, later to fade to black.
Some people do bounce back, and they do with a vengeance (some trite examples below):
Steve Jobs returning to Apple and rescuing it from bankruptcy, and building it into the world’s most valuable company
Elon Musk being ousted from PayPal, then grinding away in building SpaceX and Tesla relative silence, until becoming the richest person in the world
Bill Gates being leveled by countless anti-trust allegations and turning his attention to philanthropy
When some people bounce back, they are able to expand their success in one domain into another, expanding their ambition:
Hiphop artists starting clothing brands (e.g. Ye)
Hollywood celebrities starting liquor lines (e.g. George Clooney)
Sports stars investing in high-growth startups (e.g. Kevin Durant)
Entrepreneurs and operators building the next iconic venture capital firm (e.g. Andreessen and Horowitz)
I have a (very intuition-driven) hypothesis of why some people are able to bounce back, and others are not.
Hypothesis 1: the reason why some people are not able to “bounce back” is because the reason for their sudden success was due more to luck than skill.
The classic and extreme example of this is anyone who’s won the lottery. To memory, I do not know of any recorded lottery winner not losing most of the fortune during their lifetimes. This is a trivial example.
I think Hypothesis 1 applies less so to business success, as money is harder to lose than something more mercurial like fame (just don’t spend the damn money). But I’ll try to give an example that is less trivial.
A less extreme version of Hypothesis 1 is early startup employees or executives being terrible angel investors or venture capitalists. Extreme success due to the meteoric rise of a startup is VERY rarely attributed to the brilliance of a single employee1. And those who equate the success of them being at the right place at the right time generally lose a lot of money in their overconfidence2. I’ve talked to tons of venture capitalists at Tier 1 or Tier 2 firms who have been executives at mega-successful companies failing to put two and two together3.
Now, let’s mix some thoughts together to extrapolate to what I think about a lot: how to construct a happy life.
Hypothesis 2: A necessary component of happiness is perceived progress, in some form.
Some people may never experience sudden and massive success in a short span of time. In that case, making linear progress towards one’s goal may be a necessary or even a sufficient condition for some form of happiness.
For those who experience sudden and massive success: unwarranted success may cause more misery in the long term, as you are not able to continue the perceived progress (putting Observation 1, Hypothesis 1, and Hypothesis 2 together).
Now consider the following observation:
Observation 2: the people who are able to “bounce back” are those with enough skill AND self-awareness to improve on what made them fall in the first place.
Putting all observations and hypotheses together, then, I want to conclude (admittedly, this is all slightly sloppy logic):
Corollary 1: Necessary conditions for the co-existence of at least one massive success and continued happiness are:
Skills that are not too far from the threshold required to achieve success at that time-point
Existence of self-awareness to continuously increase skill-sets over time
Of course, an equally important question is: when do you stop this treadmill of achievement? How does that affect one’s perceived progress and thus, happiness? That’s a post for another time.
It is also not always the case that it is due to the vision of the CEO. Further, I’ve also observed CEOs who have the “vision DNA” and those who don’t.
N.B. in my observation and experience; low p-value
I’ve met enough world-class investors (e.g. Midas List investors) at this point to pattern-match what a good VC feels like.