The first one worked. I want to lead with that, because everything interesting about the story depends on it having worked.

I bought a small unglamorous business, ran it for a while, made it more profitable than it had been, and sold it for meaningfully more than I paid. From outside it is a tidy sequence and I told it as a tidy sequence for years.

The Story I Told, and the Part I Left Out of It

The version I told was about seeing something others had missed. That version is not false. There was something to see and I saw it, and I was working nights at the time and reading everything I could get, and I had earned the seeing.

The part I left out, because I did not notice it for a decade, is that the business was in a sector that got quietly easier during exactly the period I owned it. Not dramatically. Enough.

I did the work. The work was real and it mattered. And a portion of the outcome — I still could not tell you what portion, and anyone who claims they can about their own first success is guessing — was the sector doing something underneath me that I had nothing to do with and did not perceive at the time.

Why Succeeding First Is a Bad Way to Learn

A success is a terrible teacher because it validates everything you did indiscriminately. Every choice, including the ones that were errors that happened not to matter, gets filed as correct.

So I came out of that with a model of myself as somebody who could identify undervalued businesses, and I went looking for the next one with that model, and the next one was much harder in ways my model had no room for. It took two more before I had a description of what had happened that was actually load-bearing.

What I would have needed was a failure early enough that I still had the appetite to examine it. I got one eventually, and it did more for my judgment than the win did, and it cost considerably more than it would have cost at twenty-eight.

“You've told me this story four times,” an old partner said to me once, “and it gets shorter every time.”

That was the most useful criticism anyone has offered me. A story that is getting shorter is being polished, and polishing removes exactly the parts that were still teaching you something.

The other reason a first success teaches badly is that it fixes your sense of what a normal amount of difficulty looks like. Mine was, in hindsight, an unusually forgiving transaction, and I spent the following decade quietly treating harder ones as evidence that something was wrong with them rather than evidence that the first one had been generous. That miscalibration cost me two opportunities I looked at and dismissed for being difficult, which is what nearly all of them are.

What the Clean Version Cost the People I Told It To

The real cost was not mine, and this is the part I regret.

I told the tidy version to younger people for years. Buy the unglamorous thing, work harder than the previous owner, be patient, sell well. Every clause is true and the whole is misleading, because it presents a sequence as a mechanism and omits that a tailwind was operating that nobody in the story controlled.

At least two people took that seriously and made decisions on it. Neither of them did badly, in the end, though not for reasons my account had prepared them for. But I was handing out a model I had not tested against my own later attempts, and I was handing it out with the authority of somebody it had worked for, which is the most persuasive and least reliable authority there is.

I do not tell it that way now. I mostly do not tell it at all, and when I do, the sector goes in at the beginning rather than being left out entirely.

The Habit It Left Me With

When something works, I now make myself write down what was operating that I did not control. Not to be modest — modesty is a posture and I have no use for it. Because the list is the only thing standing between a result and a story, and stories are what make a man repeat something in conditions that no longer hold.

The list is usually longer than I expect. That has been true every single time, which I take as evidence about myself rather than about luck.

The business still exists, under a fourth owner. It is larger than it was and I have no idea whether it is better run. I drive past it when I am in that part of the country, which is not often.

Note: Victor Draemont is a character, and these notes are written in his voice. Nothing here is financial, investment, tax, or legal advice, and nothing here is a recommendation to buy, sell, or gamble on anything.