One great thing about being a professor is that I get to talk to my students, who are pretty interesting people. One student, an outstanding performer, came to office hours recently. Good social skills, intelligent and inquisitive, top-tier grades, diverse internships during college, president of her sorority or something—you know the type.

Despite an excellent resume for a college senior, however, she doesn’t have a job offer for after graduation. Many of us have been there. I’ve been unemployed twice in my life and I can recall my own emotional experience—fear (“what am I going to do”), anger (“why isn’t anything working”), and especially shame (“what will people think of me, what does this say about who I am”).

One phrase this student used several times in our conversation was “I’ve done everything right.” Despite the grades and the extracurriculars and the internships and the being a good person she doesn’t have the outcome that she wants. Many of us can relate to this experience as well—when we do A and B properly, it’s natural for us to expect C. It feels bad to not get C. Moreover, it feels worse when we observe someone else that didn’t do A and B and still somehow got to C.

Doing A and B, and Not Getting C

This happens all the time in investing, and probably in business more generally.

It’s not unusual for a hedge fund to research a stock, correctly model the fundamentals, get the macro environment right, nail next quarter earnings, and still have the trade blow up in their face due to a rapid shift in sentiment (DeepSeek anyone?), some unforeseen liquidity issue, or discovery of a fraud inside the company. This is a case in which the fund got A and B correct, but in order to get C, the fund also needed to correctly predict D, E, F and G, and F and G were factors nobody could possibly have predicted.

Since it’s common (and even expected) for an investment firm to “do everything right” and still be “wrong,” investors make up for this by doing lots of trades. I lost $750,000 on my first proprietary trade. My boss’s response? “I want you to put on ten times more trades.” Funds can still make money over the long haul by running lots of experiments (investments), but quickly cutting their losses on the ones that don’t work, and doubling down on the ones that do. The best investors focus on process over results.

What About D, E, F, and G?

The phrase “doing everything right” assumes that a person can know what “everything” is. In other words, it assumes that a person can be omniscient.

Success in business (and in life) is about making good decisions under conditions of radical uncertainty. To paraphrase Donald Rumsfeld, we can identify what we know and what we know that we don’t know, but we can’t do anything about what we don’t know that we don’t know. Nassim Taleb talks about “black swans”—things that exist that we can’t even imagine until we see them (until someone saw a black swan, everyone assumed that swans were always and had to be white).

In 1998, a hedge fund called Long-Term Capital Management (LTCM) blew up. In addition to being staffed by seasoned Wall Street traders, LTCM had the sharpest minds in quantitative finance, including two Nobel Laureates, Robert Merton and Myron Scholes. LTCM thought they had a perfect, risk-free trading strategy based on mathematical models of financial markets. In 1998, Russia went through a sovereign debt crisis that created market volatility that LTCM’s models didn’t predict, ultimately leading to the meltdown and eventual bailout of the firm.

If Wall Street’s best and brightest, with billions of dollars and armies of analysts at their disposal, can’t “do everything right,” why would we assume that we can?

Are You Sure You Didn’t Get C?

When we “do everything right” and don’t get the result we want, it’s also possible that we are misinterpreting the result as a failure, when it really isn’t.

This is less true in the case of my student (she wants a job, and she doesn’t have one). But this happens in startups all the time. I was a seed investor in Finalis, a company started by my buddy Federico. Finalis began as DealSyte, a due diligence platform for managing M&A deals. That version of the company “failed” to hit C, but did learn enough about customers and their problems to figure out what they really needed, which was an end-to-end solution for compliance in dealmaking. So they shifted the focus of the company to this new product. The result? Finalis’ numbers are not public, but they are doing… well.

C Exists Somewhere in the Universe of Possible Results

This idea boils down to, “if we take enough shots, we will eventually score.”

Success is ultimately a function of repeated effort—trying, making mistakes and failing, and learning from our mistakes.

The best traders not only make lots of trades (or consider lots of possible trades, even if they don’t make them), and learn everything they can from both those that are successful and those that aren’t. Entrepreneurs often succeed on the third, fourth, fifth or sixth try. This idea isn’t new to anyone reading this blog but it’s hard to persevere, emotionally, in the face of repeated setbacks.

There are two points I’ll make here. First, the path to C isn’t always clear. Sometimes, doing A and B will get us to C, and sometimes it’s D, E, F and G, and sometimes it’s doing M. Because of how unpredictable the world is it’s hard to draw direct cause-effect relationships in many cases.

Second, partial successes are a thing. In the ashes of every failure lies the seed of future success. Maybe my student, despite being rejected from a particular company she really likes, managed to build one good relationship with someone she met there. Maybe she cultivates that relationship over a period of months, and maybe that company has a new hire back out at the 11^th hour due to an unforeseen life circumstance. When the firm needs to fill a spot at the last minute, who is the first person they are going to call?

“Random” stuff like this happens all the time in the real world. Of course, it’s not random. Success like this is the product of many shots taken and none of those shots being 100% misses, because real life isn’t binary like that.

Doing Everything Right

I probably sound like a broken record at this point but for most of us, especially the insecure overachievers that populate my readership, it just comes down to doing. Life isn’t about perfect decisions, it’s about good decisions and continuing to take action when stuff doesn’t break our way in the near term.

Try, try, and you will succeed.

Exercise

Journal on the following or discuss with a friend.

1)      Noticing

Where in my life do I feel I am “doing everything right” and not getting the results I want?

What emotions come up for me as I reflect on my failure thus far—fear, anger, shame?

2)      Perspective Shift

Imagine for a moment that you are an optimist, able to see the silver lining in all situations. You may feel that this is inauthentic, or feel internal emotional tension. That’s fine, this is just a thought exercise.

If my failures up to this point contain partial successes, what are those partial successes?

What is a positive outcome that might result from the work I have done so far, however farfetched it may seem?

Becoming tougher and more resilient from repeated failure is a success!

3)      Action

How can I do everything right?

Maybe you need to try something you haven’t done yet!