Nice framework! However, would you agree that there is an error of "over storytelling" by which I mean, attaching a simple narrative to something that was in fact explained by other factors. There are many who deem themselves visionary geniuses in the game of, for example, real estate. But in retrospect, all they did was buy low and sell high...macro factors like interest rates drove their returns. They were mostly lucky. They don't tell that story when they're on your board though! They'll pontificate and brand themselves!
Agreed, it's something I've been thinking about on and off. Some thoughts in no particular order:
1. There's no reason not to "over story tell", or put another way, there's only upside if you can tell a story about how you got successful, since that makes you more compelling. The truth itself doesn't matter as much, and who's to say what really is the truth anyway since 2 ppl can view the same event and have different takes?
2. If we view success (or an event) as a cause and effect of some factors, e.g. I have a 10 factor model with 10 input factors to predict real estate returns, there are multiple stories that can be told, some of them contradictory to each other, and yet we'd likely find some ppl who have been successful with each of those strategies and can tell a story on that.
i.e. A person who picked factor 1 as the key factor, made money, and now says "factor 1 was key". Another person who picked factors 2, 3, 4 as key factors, made money, and now says "factors 2, 3, 4 combined in a weighted model are key". Another person who rejects all of these 10 factors, found another factor outside the model, made money, and now says "all these ppl have no idea what they're talking about"
3. Continuing on that view of a factor model, it seems likely we have to overfit and extrapolate future returns based on limited data, which implies there's always some amount of "oh I had intuition that wasn't entirely a sure thing, but it worked out and now I'm a genius clearly" happening
4. I feel like the "simple" answer is "well everything's complicated, most ppl are lying to themselves and to you" but that also seems un satisfying... maybe that's life though?
4 is my point! People oversimplify/lie when it suits them to fool you into thinking they know more than you. Don't fall for it. Probe the other factors and make sure you aren't granting them undeserved credibility.
This was really good, and I'm a big fan of Vonnegut, so you've hooked me. Subscribed.
Thank you! If you liked this, you might like the just-released issue, which has a guest post also on stories: https://avoidboringpeople.substack.com/p/it-only-goes-up-from-here
Thanks. It's actually how I found you, Brett's post on Twitter.
This is great and has so many applications. Sports is littered with the "cinderella" teams. It makes sense that companies and startups have the same.
Great post Leon
Thanks GJ! Yep I think the "story/narrative/thesis/pitch/vision" concept is one that applies across many if not all areas
This one is so good - thank you Leon for putting everything together in one great piece
Great read - thanks!
thanks for the feedback :)
Nice framework! However, would you agree that there is an error of "over storytelling" by which I mean, attaching a simple narrative to something that was in fact explained by other factors. There are many who deem themselves visionary geniuses in the game of, for example, real estate. But in retrospect, all they did was buy low and sell high...macro factors like interest rates drove their returns. They were mostly lucky. They don't tell that story when they're on your board though! They'll pontificate and brand themselves!
Agreed, it's something I've been thinking about on and off. Some thoughts in no particular order:
1. There's no reason not to "over story tell", or put another way, there's only upside if you can tell a story about how you got successful, since that makes you more compelling. The truth itself doesn't matter as much, and who's to say what really is the truth anyway since 2 ppl can view the same event and have different takes?
2. If we view success (or an event) as a cause and effect of some factors, e.g. I have a 10 factor model with 10 input factors to predict real estate returns, there are multiple stories that can be told, some of them contradictory to each other, and yet we'd likely find some ppl who have been successful with each of those strategies and can tell a story on that.
i.e. A person who picked factor 1 as the key factor, made money, and now says "factor 1 was key". Another person who picked factors 2, 3, 4 as key factors, made money, and now says "factors 2, 3, 4 combined in a weighted model are key". Another person who rejects all of these 10 factors, found another factor outside the model, made money, and now says "all these ppl have no idea what they're talking about"
3. Continuing on that view of a factor model, it seems likely we have to overfit and extrapolate future returns based on limited data, which implies there's always some amount of "oh I had intuition that wasn't entirely a sure thing, but it worked out and now I'm a genius clearly" happening
4. I feel like the "simple" answer is "well everything's complicated, most ppl are lying to themselves and to you" but that also seems un satisfying... maybe that's life though?
4 is my point! People oversimplify/lie when it suits them to fool you into thinking they know more than you. Don't fall for it. Probe the other factors and make sure you aren't granting them undeserved credibility.