A carefree rider zoomed past me: a) on a unicycle, b) with headphones on, and c) hands in pockets. He could just as easily run through the woods with closed eyes. A collision with reality is inevitable; the question is how and when.
His optionality is negative—it's a choice of injury and harm. By turning off the audio channel, he reduced the flow of incoming data. And deprived himself of the chance to amortize damage with outstretched arms.
It may seem absurd, but in business, people act the same way. The paradox is that it often happens when things are going well. A successful founder convinces himself (or herself) that "money must work." Since his company doesn't need investments, he actively invests in others.
The game is so thrilling that a diverse portfolio soon emerges. Formally, there are many assets, but in reality, there are no available funds. A market shake-up is enough for an entrepreneur to lose everything. Why?
The newly minted investor has exceeded the boundaries of his competence. After all, studying new domains requires time he doesn't have. Consequently, he is forced to rely on others when making decisions. It doesn't really matter whether it's the CEO of a portfolio company, a fund manager, or a financial advisor. As long as the market environment remains stable, the rider proudly zooms past everyone. Moreover, he is entirely oblivious to the vulnerability of his position.
If reading these lines made you uncomfortable, that's very good. Perhaps it's worth considering revising your strategy to reduce your risks and increase your upside.
Yours sincerely,
-Alexander
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