Smart people aren’t so smart, after all.

I think about Mark Twain a lot.

Twain, of course, is one of America’s most beloved writers. He gave a voice to the culture of the American South, and in doing revolutionized world literature. He was extremely prolific, waking up every morning to write in a special room he had constructed just for that purpose (in fact, much of my own writing routine, and thoughts about how to write regularly, are based on notes from Twain’s autobiography). The works he produced made him one of the world’s most beloved figures.

And yet, in other parts of his life – specifically in business – Twain was a crashing failure. Though Twain’s income from his books made him something like a millionaire in today’s dollars, he spent much of his adult life broke and in debt.

Twain was highly motivated by financial success and security, and was constantly seeking ways to invest his writing income so that he would never need to work (or write) again. He tried to publish his own works so that he would have greater control; his publishing company fell apart. As part of his publishing venture, he invested in a new kind of typesetter that promised to revolutionize the industry; the machine was never built. He invested in a watch company run by ex-patent medicine salesmen; well, you get the idea. By his mid-50’s, Twain was in almost $150,000 worth of debt to over 100 creditors. He filed for bankruptcy.

Many of the novels we have from Twain were written in dire straits, quick-fixes to get him out of debt. He never stopped trying to beat the system – somehow, being a brilliant author wasn’t enough.

Why Smart People Fail: The Inner Argument From Authority

The argument from authority is an inductive argument that goes like this:

Guy X believes Y. Guy X is really smart. Therefore, Y is probably true.

We’re wired to be susceptible to this argument. It seems logical to us that, if someone is very intelligent, their opinions on most subjects are more likely to be accurate, even regarding subjects outside their realm of expertise.

The problem is that there is no evidence that this is true. Just because you’re a math genius doesn’t mean you’re a business genius; these are fundamentally different skills. In fact, it seems that high levels of skill in one area typically decrease your chances of being skilled in another area – after all, if you’re busy becoming a math genius, you’re probably not out there learning to sell and talking to customers.

We don’t only do this with other people, either: we constantly think we are better at things than we are. Humans are truly poor at gauging our own levels of expertise. Often, we have an internal version of the Argument From Authority: “Well, I’m smarter than that guy, so I should be able to do what he does just as well, if not better.”

I worry constantly that I am committing this error. I have become quite driven, as I grow older, to gain some kind of financial security. In the pursuit of this goal I have started several companies and ventures, all of which have either fallen short or failed outright.

Now, part of this is the learning process. From each failure, I have learned something valuable, zeroed in on some aspect of business, or sales, or my own personality that needed work. In this way, each failure moves me closer to my goal, since I’m improving my overall skill level and thus, my chances of success.

It only means that I’m getting closer, however. It doesn’t mean that I will ever actually achieve success.

I’m sure Twain learned from his failures as well – it’s hard not to – but it didn’t help him.

The self-help exhortations to “never give up!” and “just stick with it!” are so consistent in our society that it’s often hard to admit the obvious: some people are never successful, and would have been far better off if they had given up a long time ago.

Smart Bets: Overcoming The Fear of Failure

The fear that I am dumping a lot of time and effort into something that will never pay off is very real to me. After all, that’s time I could have been writing music, or spending time with my fiancee, or working out, or sleeping. How can I tell what activities will increase my overall happiness throughout the course of my life, and which are dead ends?

You can’t, really. No one knows how everything will turn out, and in the end, all we can do is guess. What we can do, however, is make smart bets.

The process is simple:

1. Associate a specific action with your overall goal (I want to make more money; I’m going to design websites for money).

2. Find a way to pursue that action in such a way that it does not disrupt what already works in your life (I already have a job that provides income, so it would be silly to quit that job in the uncertain pursuit of more income. Therefore, I need to find a way to design websites for money in my free time. I do this early mornings and weekends.)

3. In that process, learn all you can, and relentlessly seek to improve your skill. Give it your best.

4. Pursue your new action for a year.

5. At the end of the year, review the results:

    If you had overwhelming success, great! Clearly you should adopt this action full-time.
    If you had minor success, great! Weigh the cost and benefits of increasing the amount of time you dedicate to this action.
    If you had no success, move on to something else.

Now, will there be some actions that seem like total failures, but if you would just hang on for a little while longer, would explode into huge successes? Maybe. But as a heuristic (more on heuristics here), following these steps will save you far more effort, waste, and worry than it will cost you. Moreover, having a system outside your self relieves you of the pressure and tension of constantly worrying: Am I making the right decision?

This is the year I’m really dedicating to work on my side business. It will either work or it won’t; if it doesn’t, I can give up in good conscience. I don’t have a high bar for success, however, so I feel fairly confident that it will work out.

After all, I’m pretty smart.

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