A handful of deals will make your year, so the job is to build a big enough, good enough portfolio of chances for the rare ones to find you.
By 1938 Walt Disney had produced several hundred hours of film. Most of the cartoons were short, most were liked, and most lost money. The studio was nearly broke. Then Snow White earned $8 million in six months, cleared every debt and bought a new studio. In business terms, 83 minutes was pretty much all that mattered.
Look back at any strong sales year and the same shape appears. A long list of respectable, forgettable business, and one or two accounts that carried the number. That is not a fluke in your territory. It is the normal distribution of outcomes almost everywhere, and it means average deals are a means to an end, not the end.
“Long tails—the farthest ends of a distribution of outcomes—have tremendous influence in finance, where a small number of events can account for the majority of outcomes.”
Morgan Housel, The Psychology of Money
Warren Buffett has owned 400 to 500 stocks and made most of his money on ten of them. He was right less than half the time. Sales works the same way. Losing most of the deals you chase is not a verdict on your ability, provided the ones that work really work. Judge yourself on the winners' size, not the losers' count.
“If you remove just a few of Berkshire's top investments, its long-term track record is pretty average.”
Charlie Munger
A collector built a fortune by buying work from many emerging artists. Most pieces went nowhere; a few became famous and paid for everything. But had he only ever bought paintings of dogs playing cards on velvet, the size of the collection would not have saved him. Tails need three things: a wide portfolio, real skill, and luck.
You miss all the shots you don't take, but if you don't shoot at the goal it doesn't matter how many you take. More activity only creates tails when the activity is pointed at people who could plausibly become your best customer. Qualify hard, then swing often. Those two habits work together, not against each other.
Buffett's second skill was knowing when to get out. In a pipeline, the equivalent is dropping the deal that will never close instead of nursing it for another quarter. Every hour spent on a corpse is an hour not spent taking another shot. Losing fast is what keeps the portfolio of opportunities wide enough to contain a tail.
No matter what you're doing, most of it will not work. That is normal, and the sellers who last are the ones who learn to fail well: the no does not dent them, the quiet month does not rewrite their story. Returns arrive in bunches, so keep taking good shots and give the tail time to show up.
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