The Art of Failure: The Unexpected Path to Success (Audio)

Failure is woven into the fabric of success; the right question is not how to avoid failure but how to fail in ways that lead to skill development and belief systems that enable long-term success.

“failure is woven into the fabric of success it's not how do you avoid failure that's that's the wrong question the right question is how do I fail or how should I fail in ways that lead to the type of skill development and belief system that allow me to succeed long term”

The parable of the old man's garden illustrates that when people transition from intrinsic motivation (playing for fun) to extrinsic motivation (playing for money), they lose the original motivation entirely; removing monetary reward does not restore intrinsic motivation—it extinguishes the behavior completely.

“there's this great little Parable where there's an old man with a garden and and and and one day he wakes up and his garden is torn to bits and he doesn't know why and so a week later he you know he puts his garden back together week later he go his guard goes out and the garden's torn up again he doesn't know what's happening so on a Saturday wakes up early and he goes out he learns that the neighborhood kids were playing football and they the they were running right through his garden and and so he said what am I going to do here and one day he called the kids over said kids come here he goes everyone come here so I'm so thankful that you're using my yard to play in he goes it gives me great joy to give you such great joy he said everyone I want you to come over here and the kids did and he gave all of them $5 said here's $5 um that's how thankful I am and the kid said thanks mister and they went went back to the game and the next week the kids played their football and they came the old man gave them $5 and after a couple of months kids played their football and they rushed through the game and they came and they said where's where's our $5 he said oh I'm sorry kids he goes I don't I don't have any more money to give you he goes but you're welcome to play as much as you want and as the parable goes of course that was the end of football that the kids stopped playing because what happened is the shift they started out playing because it was fun and eventually you're playing for the money and there's some version of that and everywhere in life whether it's praise whether it's the approval of other people whether it's the need for Glory or whether it's money”

Both intrinsic motivation and extrinsic rewards can coexist, but the order matters absolutely: love of craft must come first, and praise/recognition must come second; when the order flips (pursuing rewards before mastery), it invariably creates problems.

“at the end of the day what I'm always telling people both matter like you can be intrinsically motivated and like the praise and the recognition but the order has to be love of craft and then like it has to be you have to love what you're doing and then enjoy the things that come with it because when the order flips uh invariably it's uh it's going to be a problem”

Success comes from paying attention to qualia (the quality and feel of your experience) rather than quantifiable metrics (accumulation, achievements, rankings); the formula for a good life includes realism combined with directional optimism, celebration of positive things, kindness to self and others, and gratitude even when you have little.

“we talk about the qualia of your experience not the quantifiable what have you accumulated or the record it's the it's the qualia how does your life feel and so when you ask what happiness to me is I always have my hand on the pulse of the quality of my experience and I'm spending time with people that I find interesting and they're not always the most successful sometimes they're just really interesting you know the mechanic that fixed my car is a genius my opinion people go into that garage with their cars every day and nobody knows that they're entering a place with a remarkable human being”

In golf and markets, there is a paradox about opportunity: sometimes you have to let things happen naturally (wait for genuine opportunity), and sometimes you have to force a result; knowing which situation applies requires experience and judgment, and people often fail by forcing when they should wait or vice versa.

“both in golf and the markets the the the Paradox is there sometimes you got to let it happen and sometimes you got to make it happen and when people try to force force a result when they shouldn't like that's when when you get stopped out and the opposite also true so how do you know when to oppress an advantage”

Knowing when to press an advantage requires evaluating your underlying why/motivation; when people press an advantage incorrectly, it's usually out of impatience or frustration rather than genuine opportunity; this is happening in markets now where investors missing targets force low-probability bets to meet mandates.

“evaluate your why because what happens is when people press an advantage incorrectly it's usually out of impatience it's usually out of frustration it's happening right now in the markets there's not a lot of volatility in the marketplace right now and and you're on the your mandate as an investor is to return well 10% right you say that's your number and you're only up 5% and there's no way to make money in your strategy all of a sudden it's like well I've gotta I'm GNA press whatever Advantage I have that's a low probability Advantage but you're going to force a little Advantage you're G to make a mistake and then you're going to lose your job”

Mastery-oriented individuals react to failure with curiosity and view failures as steps in a learning process (exemplified by Edison's 'thousand steps' metaphor), while ego-oriented individuals react to failure with embarrassment, which is among the most psychologically painful emotions—second only to grief from losing a loved one.

“when Mastery oriented individuals fail the reaction is curiosity it's it's what it's what um um Thomas Edison said you know when asked hey you know what was it like to fail a thousand times he said he was reported a thing the light bulb was not an invention with a thousand failures it was an invention that simply required a thousand steps”

The most successful people across domains (Shanahan McDermott, Jordan Spieth, Steve Cohen) have remarkably similar conversations about decision-making and principles, despite different domain expertise; success comes from consistent application of basic principles rather than domain-specific brilliance.

“I was up in Buffalo meeting with a guy named sha mcder was the head coach of the Buffalo Bills sha mcder is an unbelievable human being he was 70 and 0 as a high school wrestler like do you know how hard it is to be at 70 at anything so it's be 70 and0 in high school wrestling I think in Pennsylvania which is one of the most competitive places in the world for wrestling and he ends up becoming you know an incredibly good high uh NFL coach under consideration of coach of the year he helped break a 17-year playoff slump for the Buffalo Bills they're now in the playoffs seven years in a row this is Shawn mcder so any I was up in Buffalo meeting with Sean after Buffalo I flew to Dallas Texas spent two days with a guy named Jordan spe Jordan spe is gonna be a Hall of Fame golfer he's already got the records just matter when they induct him and I flew from there to Greenwich Connecticut or Sanford Connecticut I spent two days with a guy named Steve Co who's hedge fund manager who's now the owner of the Mets who's known in the world that's just you know there's a great article you know Steve Cohen always wins wins in the markets he wins in the art world he wins in just a winner his horse won the Kentucky Derby just a brilliant guy and I remember walking with Steve after these other days and I'll never forget this she I said oh my God this is the same conversation I just had at the tail end of the curve successful people are generally having the same conversations different parlaments different language”

The most successful people share six key characteristics: humility (acknowledging they don't know), combined with conviction in their path; willingness to problem-solve and test continuously; refusal to react to failure with embarrassment; curiosity and mastery orientation; and willingness to evolve (Kaizen/continual improvement).

“number one believe it or not is humility the best in the world readily acknowledge that they don't know now I'm not saying so they're humble but there's also a little arrogance right there's conviction there's belief that that what I'm doing is right I believe in my path but underneath that is the humility um and the recognition that that they don't know which is why the Second Step it's a never-ending series of problem solving and tesing and risk-taking so they're willing to try a bunch of different things until they get it right which is oh by the way why they're Mastery oriented because they know they're going to fail but they refuse to they refuse to react to failure with embarrassment they react to failure like Thomas Edison with more curiosity Elon Musk is a perfect example of that in in mods Tiger Woods was a perfect how many times did Tiger Woods changed his golf swing every expert was was saying you should never do this you have the greatest golf swing in the history of the game but it was this it was governed by this idea of Kaizen which is continual Improvement every day willing to fail and so to you know you're constantly evolving”

At the elite level, decision-making is cognitive (understanding which advantages you have and how much risk you can tolerate) combined with emotional sophistication; you must know yourself (understand how losses affect you), because if losses would meaningfully affect your future decision-making, that's your tell that you can't handle the risk required for that opportunity.

“in modern day analytics you're running probabilities you know if if if if you have a trading strategy and the numbers say that you have an advantage you know the old saying that if you don't know who the sucker at the table is you're the sucker and that's true in all games in the achievement domains where there's a scoreboard and there's competition and so you have to find a way to map your advantages and know in the moment whether you have an advantage and if you do how much risk are you how much risk are you willing to take and what losses are you willing to tolerate and then the psychological component under that is can you handle losses well and if you can't if you're the sort of person who's going to say you know if I lose this much money on this trade it's going to meaningfully affect what I do in the future future that's your tell”

Flow states—characterized by loss of time, effortlessness, transformation of time, and elation—are the hallmark of people who are great at what they do; identifying what activities produce flow in your life and doing more of them (if healthy) is a learnable approach to success and happiness.

“at the height of The Human Condition are what are called flow States and flow states are when we get in the zone and so you know flow states are governed by you see the the loss of time that hours pass by and you're like oh my God where did time go um it's the transformation of time there's an effortlessness to it um hard things sometimes feel easy and what you realize is is flow states are the Hallmark of of people who are great at what they do they get lost in what what they do and so if you're listening to this you should ask yourself what do I do where I lose track at times... so long as it's healthy... do more of it that's what you can learn from success”

Objective time (measured in years and decades) eventually transforms into subjective time (which seems to pass faster with age); you get roughly 80 years of life, the first ~5 are not conscious, and the last chunk lacks physical vigor, so presence in the moment—even during pain—becomes the critical practice.

“we get if we're lucky call it 80 years in life you know for the first dozen of them you're not really or first five of them you're not really conscious or conscientious the last bunch of them there's no physical Vigor and objective time turns into subjective time which Mean Time speeds up and so for me it's it's cliche but it's it's making sure that I'm present for every moment of it even and especially the pain people ask me what do I do when I'm afraid stare at it like go eyeball to eyeball with the fear because if you run away if you allow life to bully you you're not present for the moment you're checked out”

Freud's concept of sublimation explains how channeling desire into creative work produces great art, architecture, and innovation; Ayn Rand's philosophy emphasizes this—when desire is sublimated into evolution and creative expression it produces the highest expressions of the human condition.

“that's why proponents of capitalism and free markets you can just see it in modern day like the world moves because because individuals innovate in involved whether it's Bill Gates Steve Jobs Jeff Bezos has created $ 800 billion do of wealth for other people... that's what Freud called sublimation if you sublimate and channel desire uh into Evolution it's what creates great works of art architecture right andrean writes about this in in Fountain Head”

Kaizen (continuous improvement) is a governing principle for the best performers; they constantly evolve and are willing to fundamentally change their approach (like Tiger Woods repeatedly changing his golf swing despite having the 'greatest swing in history') because mastery orientation prioritizes getting better over being right.

“Tiger Woods was a perfect how many times did Tiger Woods changed his golf swing every expert was was saying you should never do this you have the greatest golf swing in the history of the game but it was this it was governed by this idea of Kaizen which is continual Improvement every day willing to fail and so to you know you're constantly evolving”

When people feel embarrassed about failure, the brain releases cortisol, epinephrine, and norepinephrine, which creates a distortion of reality where threat perception dominates and risk-taking shuts down; this leads to avoidance behaviors that compound into chronic underperformance over decades.

“what happens is when people feel embarrassed their their their brain starts create send signals where they create cortisol stress uh epinephrine adrenaline nor epinephrine their perceptions change so rather so when you're embarrassed rather than than see opportunity all you see is threat right so all of a sudden there's a there's a distortion of reality and so all of a sudden when all you see is threat you stop taking risks”

Achievement goals research shows people bucket into two categories: mastery orientation (driven by intrinsic curiosity and love of problem-solving) or ego orientation (driven by desire to beat others or prove oneself to others), and these orientations are highly predictive of ultimate success.

“research on what are called achievement goals achievement goals explore the why the human why why do you do what you do what you after you know you ask a thousand people this question huge data sets what you come to find is these thousands of people all of a sudden they tend to bucket into one of one of two categories which either a Mastery orientation or an ego orientation and these two different orientations as to why people do what they do tend to be very predictive of of ultimate success”

Sense of humor is one of the greatest tells of psychological health and well-being; Freud argued that wit is critically important because life is so painful and difficult that you must find things funny to survive.

“one of the things things we know in Psychology is sense of humor is one of the greatest tells of of of psychological health and well-being one of the keys to psychological health is to be able to laugh at things that are funny and that's one of the think the problems of the modern times are people have lost their sense of humor and you know Freud wrote about wit being critically important because life is so painful and so difficult you have to find a way to find things funny if you're going to survive in this world”

Contrary to assumptions, people with localized brain damage who cannot feel emotions have worse decision-making, not better; emotions are not corruptions of reason but essential components of good decisions; enlightened individuals are not without emotion but have refined their emotional reactions.

“one of the things we do even though we try to ARB Out The Human Condition from decision making you know as Antonio deasio writes in um in in in in searching for Spinosa you know he says like when you look at people with localized brain damage who have no ability to feel emotions their decision making is not good when human beings get localized brain damage where they can't feel emotion their decision making is not better it's wor in fact so if you look at someone like you know I guess an enlightened individual they are not without emotion they have refined their emotional reactions in a way that elevates their senses”

When Nike began offering contracts and financial incentives to marathon runners, race times decreased because runners shifted from intrinsic motivation (love of running) to extrinsic motivation (pursuit of rewards), demonstrating that incentives can undermine and demotivate intrinsic motivation that leads to greatness.

“there's a great book called Born to Run which talks about what happen if you look at what happened to the Record Times in marathoning is when Nike entered the equation and started rewarding Runners with contracts the speeds went down because people stopped love they stopped running for the love of The Craft and they started Ed running for the incentive for the reward itself and what is known is that incentives uh are demotivating they undermine the intrinsic motivation that lead to Greatness”

Most people overestimate how much others care about them and what others think of them (a psychological phenomenon called personal fable); intentionally selecting 3-4 trustworthy mirrors from whom to solicit feedback, rather than caring about everyone's opinions, is one of the key predictors of success.

“it could be the media it could be the writers and reporters it could be the critics it could be your your friends it could be the the the crowds mostly in business it's management it's like I care what what my managers think of me what what my boss thinks of me people don't pay too much attention to forming opinions of other people tends to be just a quick reaction that they're careless about and they care even less about the words they use and so when you go around life caring too much what people think about you and you actually like internalize and you let it affect your decision making it's a recipe for for just a bad life with no happiness so what I'll say is let's pick three people maybe four who you're going to give the power who you're going to actually listen to who you know love you and care about you who are accurate observers and who will tell you the truth”

Kids naturally love to learn and play (intrinsic mastery orientation) until around third grade, when schools introduce grading systems; grading causes a shift from mastery orientation (love of learning) to ego orientation (concern with grades and others' judgment).

“you go back to the why and so what you'll often see in the game of golf even happens with students in school right it's you know why do kids love to learn because learning is fun why do kids you know go on the golf course want to play until the sun has set and they're out there all night because it's an amazing sport it's super fun it's it's it's it's just a fascinating you get lost in the in the game so at what point in in educational development do kids you know start to dislike school happens around third grade what happens in third grade we start giving kids grades so what happens is there's a shift from a Mastery orientation to what's called an ego orientation”

Success must be clearly defined before assessing success strategies; at the tail end of the curve where all competitors are high-effort and persistent, winning is not primarily about working harder—it's about knowing when to quit, fold, and cut losses (the other crucial part of success that no one wants to talk about).

“you have to Define what success is like what do we mean by quote unquote success right number one number two on the one hand persistence and resilience and grit are critically important to succeed in other words powering through failure and the idea of keeping at something and and and working your way but here's the other part of the equation no one wants to talk about a lot of winning is knowing when to quit it's knowing when to get out of a Bad Bet knowing when not to beat your head over awall like in poker for example it's knowing when to fold it's in the markets knowing a bad trade and cutting your losses”

Desire is a universal theme across all major religious traditions (Christian guilt about excessive desire, Hedonist pursuit of desire, Buddhist removal of all desire as path to happiness), and it's the source of both the highest highs and worst behaviors; the key is whether desire is sublimated and channeled into evolution and creation or left unchecked.

“what we know is that that desire is the thing that leads to all the cognitive biases that that that almost all of the mistakes people make in life is a function that they want a particular outcome come they want a particular thing the good of it is desire as Ann Rand AR articulates right as as Adam Smith and The Wealth of Nations when he talks about free markets he says that that the desire leads to Innovation Innovation leads to to competition which eventually leads to the best product in the market which is what elevates the Human Condition and that's why proponents of capitalism and free markets you can just see it in modern day like the world moves because because individuals innovate in involved whether it's Bill Gates Steve Jobs Jeff Bezos has created $ 800 billion do of wealth for other people you know you see the way free markets work they're a function of desire and that's what Freud called sublimation if you sublimate and channel desire uh into Evolution it's what creates great works of art architecture”