The college-admissions, political and sporting scandals reveal how far we’re willing to go in seeking status. How much are we letting our desire for status and what others think of us drive the ship? In a world where comparison is only increasing, how can we keep ourselves from getting caught in the rat race?
Everything in life is a game — education, careers, business, politics.
There are fundamentally two huge games in life that people play. One is the money game. The other one is the status game. Most public figures are playing a status game, which differs from the wealth game in that it is zero-sum and the wealth game is non-zero sum.
Status game is an old zero-sum game, since it doesn’t gain its power from how many people benefit from it, it gets its power from how many people *can’t* benefit from it. Like a nightclub, we have a massive velvet rope with a long line of people trying to get in, and the more exclusive you make it, the more valuable it is. Politics is an example of a status game. Even sports, social media, and universities are examples of a status game. Playing the status game will likely reduce inner tranquility and will conflict with your wealth building goals.
People are status-seeking monkeys. Society holds dear a lot of status symbols. Status was highly correlated with survival during our hunter-gatherer days, so status seeking behaviors are conserved in our genes. As gatekeepers decline, status signals shift from the approval of one to the approval of many.
We seem to live in a culture today where people are more concerned with appearing to be something important rather than actually being something important. A high Twitter follower count, a couture logo on a shirt pocket, and a kid who attends a prestigious college can all seem like status symbols that signal we have value and convincing proof that we matter in the world. See: the Kardashian sisters, 63% of all Instagram users, athletes who make rap albums, etc.
Humans are always signaling. Rather than really looking at yourself, you’re looking at how other people look at you. The most dogged status-seekers have a strong “external locus of control” — a belief that the world revolves around what others think of them, rather than what is objectively true or valuable. Nowadays, most of us adopt values like we shop for shoes: subject to fashions and vanity. People seek out the most efficient path to maximizing social capital.
Brand is one of the most powerful and durable kinds of resource, as well as one of the most complicated and lengthy to build. It’s interesting to look at career strategy applied through the lens of risk. It’s worth noting that the biggest risk was neither financial nor had to do with time — it was the reputational risk. Most people think about financial risk, but reputational risk is far more insidious inhibitor of people pursuing ideas that at first seem weird but then become widely held.
Some people find status games distasteful. Despite this, almost everyone I know is engaged in multiple status games. The Internet influenced status in two ways: The Internet increased the total amount of global status. And by making status global, the Internet highlights the ways we lack status. Even if there’s more status, people feel like they have less of it. Weird paradox. If you look at the respective mission statements of Twitter and Facebook — “to give everyone the power to create and share ideas and information instantly without barriers” and “to give people the power to share and make the world more open and connected” — what is striking is the assumption that these are fundamentally positive outcomes. There’s no questioning of what the downsides of connecting everyone and enabling instant sharing of information among anyone might be. If we think of these networks as marketplaces trading only in information, and not in status, then we’re only seeing part of the machine. Some people sneer at people hashtag spamming on Instagram, but then retweet praise on Twitter. Others roll their eyes at photo albums of expensive meals on Facebook but then submit research papers to prestigious journals in the hopes of being published. Parents show off photos of their children performances at recitals, people preen in the mirror while assessing their outfits, employees flex on their peers in meetings, entrepreneurs complain about 30 under 30 lists while wishing to be on them; life is nothing if not a nested series of status contests. It’s kind of a disease — social media is making celebrities of all of us and celebrities are the most miserable people in the world. Of course, status is equally potent as fuel for the darkest, cruelest parts of human nature.
Have I met a few people in my life who are seemingly above all status games? Yes, but they are so few as to be something akin to miracles, and they are making the rest of us feel lousy over our vanity. The number of people who claim to be above status games exceeds those who actually are. I believe their professed distaste to be genuine, but even if it isn’t, the danger of their indignation is that they actually become blind to how their product functions in some ways as Status as a Service business.
There are a number of reasons for this, but a large part of it is that,
As we grow up, we are rewarded and punished based on meeting the approval of other people’s standards, not our own. We all have the desire to fit in, whether at school, work or in social circles. When you look at school not as a place where we learned information, but as a place where we learned about ourselves, you discover there are some lessons we pick up without realizing it. One of the things school taught you without you even realizing it is that success comes from the approval of others. Make good grades. Take advanced courses. Play on the sports teams. Score high on standardized tests. These metrics make for a productive workforce but not a happy workforce. Growing up, everything you’re told to do is for no other purpose than to earn the approval of others around you. For this reason, people often seek status because they believe the status will contribute to greater social acceptance. Our system is performance-based and not purpose-based. It teaches mimicry and not passion. In the past few decades, concerned parents and teachers have tried to remedy this “self-esteem” issue by making it easier for kids to feel successful. But this just makes the problem worse. Not only are you training kids to base their self-worth on the approval of others, but now you’re giving them that approval without them having to actually do anything to earn it!
The second thing school taught you is that failure is a source of shame. We get it hammered into our brains over and over that failure is always unacceptable. That being wrong is shameful. That you get one shot and if you screw it up, it’s over, you get a bad grade and that’s it. But that’s not how life works at all. Failure helps us. It’s how we learn. Failed job applications teach us how to be better applicants. Failed relationships teach us how to be better partners. Launching products or services that bomb teach us how to make better products and services. Failure is the path to growth.
In general, understanding how to build a moat is hard (and takes a long time), so people affiliate with large, zero-risk, “high status” institutions or brands as short hand: Harvard, Goldman Sachs, McKinsey, Venture-backed blitzscaling, etc. Things that look like “moat” but likely aren’t or may fade: Proprietary networks, being something other than one of the best at any tournament style-game, many “awards”, social media followers or general reach without “respect”, anything that depends on information asymmetry.
“Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.” ―John Maynard Keynes
Staking your self-worth on how others view you — is ultimately self-defeating.
It’s healthy to feel like you’re productive and making a worthwhile contribution to society. In that case, you might acquire status as a natural result of your commitment to something larger than yourself. However, playing the status game — in other words, staking your self-worth on how others view you — is ultimately self-defeating.
If status is your primary goal, you’ll be unhappy without it and you’ll be unhappy once you acquire it.
When you finally get what you want, you’ll realize that it wasn’t what you were seeking in the first place. Becoming successful is less about the destination. Most people dream to reach the destination. Once they get there, they will realize the best part was the journey. They will want to go on the next journey. Joy is found not in finishing an activity but in doing it. For many people, enjoying life means solving problems and shaping the future. That never ends.
I’ve met a lot of people who achieve their goals and are still miserable, depressed, angry and unfulfilled. That’s because pleasure only lasts for a moment or two. It’s in the body. It’s like eating cake. Happiness is in the mind. You get the grade, or the job, or the car. Someone gives you a compliment, or you win an Academy Award. It’s great but it doesn’t last. Pretty soon it’s just a statue on the mantle or a car in the garage, right?
Only growth and contribution give us fulfillment and meaning. Life wants us to grow. The more we grow the more we have to give. Remember: What you get will never make you truly happy, the whole game is WHO WE BECOME.
Like Donald Trump once said, “Money and status were never big motivations for me, except as a way to keep score. The real excitement is playing the game.”
I think the biggest career mistake people make is they’re afraid to look dumb. In order to ensure their brand’s reputation stays right, they waste the privilege of being able to take risks and forge their own path (which is arguably core of what makes capitalism and the US special), follow safe paths that cap their downside, not realizing that they also cap their upside. And said paths are often tournament-style competitions, and perhaps not as safe as they think.
Another mistake is premature self-labeling or optimization, which closes off other, hidden, opportunities. You would not be able to find your passion early. My passion hadn’t even been invented yet when I was 12.
As information symmetry increases, the value of brand decreases. Brand might be less powerful than they once were. In a world with perfect information symmetry, your Harvard degree is only worth the intrinsic value of the skills, networks, etc. developed there.
Similarities between an Ivy League degree and a designer bag are: First, most of the seller’s pricing power comes from brand value. Second, most of the value for the buyer comes from what the product signals to others. People signal what they don’t understand. The person who signals they are wealthy, doesn’t understand wealth. The person who signals how busy they are, doesn’t get anything done. The stronger the signal the weaker the understanding. You can be an elite and have a big brand (have distribution), but not respected. People will use you for your distribution, but your role will be limited to the eyeballs you can summon. Once you’ve served your purpose, you are no longer needed.
If life is a game, how do you play it?
The answer will have a huge impact on your satisfaction, your choices, and how you achieve success. The difference between approaching life as a game with an end, or a game that goes on forever is that, playing to win isn’t nearly as satisfying as playing to keep the game going. How you play the game of life will define the learning you pursue. Finite players need training. Infinite players need education. Whether you choose the finite or infinite game will also determine how you define success, and what you need to achieve it. Finite players need power. Power gives them the best chance to win in each successive contest. Infinite players need endurance. They need attributes to keep them going. Let us say that where the finite player plays to be powerful, the infinite player plays with strength. Ultimately, approaching life as a finite game or infinite game also impacts your daily attitude. The finite play for life is serious; the infinite play of life joyous. Considering your life through this frame helps you determine if you are making the right choices to be successful at the kind of game you want to play.
Wealth is not a zero sum game — it’s a positive sum game. Wealth creation is actually a status game that creates more opportunities for positive-sum status games. The key here is just to make more games (businesses) so all can win. The great game of life is a win-win game. Natural games are single player, positive-sum, internal, judged by nature/markets. It is a beautiful game that is worth playing ethically, rationally, morally, socially for the human race. Wealth isn’t about taking something from somebody else — it’s about creating abundance for the world. Striving to be wealthy, by society’s or one’s personal definition, is what we should all be doing in this life. We should strive to create abundance through innovative products and services.
Opting out of the traditional status game begins with the awareness that it is completely up to us how we define our value.
If you pursue skills, you’ll sacrifice network, brand/status, and short-term money. You may even look dumb. You’ll toil in ascetic obscurity until, suddenly, you won’t. And all these opportunities will come your way, and then more as your skill/asset compounds.
If you can, take smart bets that have asymmetric pay-offs: If you win, you win big. If not, onwards, who cares — people forget. Especially if you’re young, you can always blame it on youth, or find some way to rationalize post-facto. Years spent on failed ideas are often forgotten when success comes along.
If you’re not afraid to look dumb for a certain period of time, you can benefit from sort of a social-cultural arbitrage. If you’re not afraid to look dumb for a certain period of time, you’ll take high upside bets that others won’t take, and keep trying when last try fails.
It’s worth emphasizing the “certain period of time”. To the extent that one wants to be seen as “smart”, the goal is not to look “smart” at every step of the way-it’s to look “smart at the “end”, and often you have to look dumb for a certain period of time to get there. This is where the stay foolish part comes from in Steve Job’s speech. Sometimes, however, you look dumb forever, so you want to pursue something that, even if bombs, the pursuit was its own reward.
Society should have fewer elite reference points and make it common for people to pursue non-prestigious work; those in the services aren’t all trying to earn their masters. We should suppress the value of certain status indicators, and that encourages people to think for themselves. To put it another way, there should be fewer tournaments for kids to go through, and the value of winning them should not be so high.
The why’s of life are far more important than the what’s of life and that’s a message that is rarely communicated growing up.
But this does not mean brands and status will die. One of the reasons why brands and status might always be a thing is that the Internet isn’t touching one of their other fundamental functions: signaling.
One of the fundamental functions of a brand or status is to signal quality by getting you to play an iterated game instead of a single move game. Single move interactions can lead to market failures.