Being #150 on a steep upward climb is better than being #2 but falling from #1. This is because observers are heavily influenced by recency bias and tend to romanticize the future potential of someone on an upward trajectory. Momentum creates a more powerful narrative than a static high position.
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Jeff Aronson warns that prolonged success breeds dangerous overconfidence. When an investor is on a hot streak and feels they can do no wrong, their perception of risk becomes warped. This psychological shift, where they think "I must be good," is precisely when underlying risk is escalating, not diminishing.
Simply keeping pace with peers is not a valid measure of success. If peers are taking excessive risks in a bubble, matching their performance means you were equally foolish. True skill is outperforming in bad times while keeping pace in good times.
Momentum distorts perception. When things are going poorly (negative momentum), your underlying capabilities are greater than your current results suggest. Conversely, when you have positive momentum, your success is often the result of past efforts, not current genius. Don't believe the hype in either direction.
The public instinctively places every company on a story arc with a rise, peak, and fall. Founders must actively shape the perception that their company is still on the upward slope. Being seen as pre-peak inspires confidence, while being seen as post-apex invites negative assumptions.
Humans naturally project the future in a straight line, but disruptive innovations like Tesla's grow exponentially. Progress seems slow, then explodes, catching linear thinkers by surprise after the biggest investment gains have already been made, creating a gap between perception and reality.
The public has a "homeostatic set point" for how much success a company deserves. Being seen as "overrated" invites criticism, while being "underrated" encourages people to champion you. The goal is to be perceived as deserving of even more success.
Don't measure momentum solely with metrics like revenue. At its core, it's a shared state of mind and belief system within the team. Its true strength is determined by how many people actively participate in that belief, not just by the leader's individual optimism.
Rapid startup success stories are misleading. A company's quick victory is almost always the result of its founder's decade-long journey of grinding, learning, and failing. The compounding effect of skills, credibility, and network building is the true engine behind the breakthrough moment.
High-growth companies create a virtuous cycle for talent. The faster a company grows, the more career advancement opportunities it creates, which attracts the best people. This influx of A-players then accelerates growth further. Conversely, stagnation creates a vicious cycle, repelling top candidates and making growth harder to achieve.
Similar to how charisma is often ascribed to leaders only after their organizations succeed, we tend to label people as geniuses after a major achievement. This creates a narrative fallacy where we assume innate genius caused the success, rather than success causing the attribution of genius.
