The Secret of Wealth Created by 99% Failure: The ‘Tails You Win’ Principle

Have you heard the story of Heinz Berggruen, the greatest art collector of the 20th century? He amassed enormous wealth by buying works from legendary painters like Picasso and Matisse at unbelievable prices. Naturally, the world praised his ‘genius eye.’ But there is an uncomfortable secret most people miss.

Was his success really due to his ’eye’? It’s half true and half false. He actually bought countless artworks. And 99% of the pieces he purchased either barely appreciated or even lost value over time. What changed his life was just a few ‘jackpots.’ In other words, his wealth was the result of 99% failure and 1% miraculous success.

This is exactly the powerful and strange law that governs the world of money, which we will deeply explore today: the ‘Tails You Win’ principle. This article will question why our brains instinctively ignore this law, how giants like Amazon and Google institutionalized ‘failure’ to become monsters, and where our society—one that treats failure like a sin—should head.

Now, let’s begin the journey to face this uncomfortable yet great truth.

Chapter 1: The Asymmetry of Success – Why Our Brain Fails to Recognize the ‘Tail’

The human brain is essentially a machine optimized for survival. For tens of thousands of years, our ancestors learned to survive by recognizing predictable patterns. Sudden, unexpected ‘bad tail’ events—like a predator attack—meant death, so our genes are wired to react extremely sensitively to loss and risk.

This is what behavioral economics calls ’loss aversion.’ The pain of losing 10,000 won is about 2.5 times greater than the joy of finding 10,000 won. This explains why even small failures cause us so much distress.

Moreover, our brains tend to view the world through the lens of an ‘average world.’ Like height or weight, most things cluster around the middle in a familiar ’normal distribution.’ But the world of wealth and innovation is governed by a harsh rule called the ‘power law’ or ‘Pareto distribution.’ A tiny minority causes the majority of results; the top 1% takes 99% of the gains.

Understanding this fundamental difference between the two worlds is the real core of ‘Tails You Win.’

• Losses from failure are finite: Even if you lose everything in stocks, the worst is losing 100% of your principal. There is a clear floor.
• Gains from success are infinite: On the other hand, there is no upper limit to returns when you succeed. 100%? 1,000%? Even 100,000% is possible.

This tremendous ‘asymmetric opportunity’ is the secret to wealth. Suppose you invest 100 million won in 10 startups and 9 fail. Horrible, right? But if just one grows 100-fold to be worth 10 billion won, your final asset is 9.1 billion won. The success rate was only 10%, but the result is an overwhelming victory. We understand this logically, but our hearts instinctively reject it because of the pain from 9 failures. We obsess over the number of failures, but this world is decided by the size of success.

Chapter 2: The Venture Capital Playbook – Perfectly Designed to Catch the ‘Tail’

There is a group that has mastered the art of the ‘Tails You Win’ strategy: Silicon Valley venture capitalists (VCs). They are hunters whose sole goal is to find the ’tail.’

Legendary investor Peter Thiel said, “One Facebook in our fund made more returns than all other investments combined.” This is common sense in the VC world. Their playbook is clear:

• Cast a wide net (Spray and Pray): Invest in dozens or hundreds of early startups to increase the number of opportunities.
• Failure is normal (Normalization of Failure): It’s routine for 70–80% of the portfolio to fail. Failure is just the cost of hitting a home run.
• Only bet on unlimited upside: They only bet on companies with potential to grow 100x or 1,000x.
• Wait patiently (Long-Term Horizon): They play the role of ‘patient capital,’ waiting 7–10 years for the big ’tail’ to explode.

What we should learn is their way of thinking: embracing countless failures willingly and waiting for that one dramatic success that changes the world. What could be your ’tail’ in life?

Chapter 3: Giants Born from the Crucible of Failure

‘Tails You Win’ is the actual operating principle deeply embedded in the DNA of the world’s largest companies.

Amazon: An Empire Turned Laboratory

Amazon’s list of failures is a corporate graveyard: Fire Phone, Amazon Auction, and more. But Amazon had Amazon Web Services (AWS), the most successful ’tail’ in history. Originally an internal side project, AWS now accounts for over half of Amazon’s total profits. Jeff Bezos said, “Failure and innovation are twins,” treating failure as an investment in the future.

In the late 1990s, bookstore shelves were limited. Only bestsellers got noticed. Joe Simpson’s mountaineering memoir ‘Touching the Void’ was one such book. Published in 1988 and well-reviewed, it had become an ‘old book’ forgotten by many.

But miracles happened at Amazon, an online bookstore without the physical shelf constraints of offline stores. As long as it was in stock, any book could be sold.

One day, Jon Krakauer’s Everest tragedy book ‘Into Thin Air’ became a global bestseller. People started ordering it on Amazon. This is where Amazon’s magic began: the recommendation system ‘Customers who bought this item also bought.’

Amazon quietly recommended ‘Touching the Void’ to climbing enthusiasts who bought ‘Into Thin Air.’ Similar themes, excellent writing. People started noticing, “Oh, this book exists too?” Sales of ‘Touching the Void’ grew by word of mouth, and the algorithm showed it to more people.

The result was astonishing. The once-forgotten 10-year-old ‘Touching the Void’ outsold the bestseller ‘Into Thin Air,’ creating a reverse bestseller phenomenon impossible in offline bookstores.

This is Amazon’s ’tails win’ method. Instead of relying only on a few bestsellers (the body), millions of lesser-known books (the tail) steadily sell through the recommendation system, and their total sales surpass the bestsellers. Amazon expanded this principle beyond books to all products, becoming the world’s largest store.

Google/Alphabet: Failing Smartly

Google has its own ‘Google graveyard’ with many buried services like Google Plus and Google Glass. But from the policy of allowing employees to spend 20% of their time freely came Gmail and AdSense, and the bargain acquisition of Android became the decisive move dominating the mobile era. Google is a master of ‘seeing data and failing fast.’

In the early 2000s, the online ad market was dominated by large portals like Yahoo! They sold the ‘prime time’—the portal’s front page—to big companies like Nike and Coca-Cola, creating an exclusive league.

Small business owners like Mr. Kim, who made handmade fishing bait in a remote mountain village in Gangwon Province, had no way to advertise online or promote their shops. His bait was a ‘hidden gem’ specialized for certain rivers and fish, but unknown to the public.

Then Google launched the innovative advertising system ‘AdWords.’ Google’s idea was different: “Why should everyone see the same ads? Let’s show ads tailored to each person’s needs, like search results.”

Instead of selling whole ad spaces, Google started selling ’tails’—search keywords. Mr. Kim no longer had to compete with Nike. Instead, he placed ads on very specific keywords like ‘handmade worm bait for trout fishing in Pyeongchang River.’ Although few searched for this, those who did were almost guaranteed customers.

Ad costs were just a few dozen to a few hundred won per click. Thousands of ‘Mr. Kims’ started placing ads on millions of ’tail keywords’ related to their products. Small ads like ‘best handmade cakes near Hongdae’ or ‘dog food for allergies’ formed a huge mountain of ad spending that surpassed big companies.

This is Google’s ’tails win’ method. Instead of relying on a few big advertisers (the body), countless small businesses (the tail) advertise in their niches, building the world’s largest advertising empire. Google gave the ’tails’ a voice, and those ’tails’ made Google the world’s strongest company.

Disney: Magic Born from the Brink of Bankruptcy

Walt Disney’s early days were failure itself. The studio went bankrupt and lost character rights. But from the ashes came ‘Mickey Mouse.’ The real ’tail’ that made Disney an empire was the bold bet on the feature-length animation ‘Snow White and the Seven Dwarfs,’ which everyone called crazy. This one daring bet created today’s Disney.

For decades, Disney maintained its kingdom focusing on popular characters like ‘Mickey Mouse’ and Elsa from ‘Frozen.’ But with streaming giants like Netflix emerging, Disney faced a crisis. They had to create their own streaming service, ‘Disney+.’

Many expected Disney to rely on new Marvel movies or Star Wars series. But Disney’s real secret weapon was elsewhere: thousands of ‘forgotten’ contents sleeping in dark warehouses for decades—the ’tail.’

From the 1937 ‘Snow White’ to 1960s black-and-white TV shows, 1990s nostalgic cartoons like ‘The Greedy Uncle,’ even parade videos from now-defunct Disneyland. People subscribed to Disney+ for the latest Marvel movies but discovered and got excited about nostalgic content from their childhood.

A father showed his son ‘Robin Hood’ from his youth; an uncle binge-watched over 30 seasons of ‘The Simpsons’ with his nephew. People came for the new hits (the body) but stayed captivated by the vast library of past content (the tail).

The power of these ’tails’ was beyond imagination. Disney analyzed which old content people enjoyed and created new series like ‘The Mandalorian,’ starring minor characters from the Star Wars universe, achieving huge success. The dusty ’tails’ in the warehouse became golden geese.

This is Disney’s ’tails win’ method. Instead of betting the company’s fate on a few blockbuster new releases, Disney wins the streaming war with the powerful ’tail’ of its nearly 100-year-old vast content library.

Amazon, Google, and Disney all saw the potential of the ’tail’ that no one else paid attention to while everyone focused on the ‘body.’ They proved that these ’tails’ combined can become a massive force that changes the world. This is the great story of ‘Tails You Win’ that changed 21st-century business.

Chapter 4: Korea’s Dilemma – A Society That Cuts Off the Tail

Now, back to our story. Unfortunately, we live in a culture that treats failure as a stigma, not a process, and does not tolerate challenges that deviate from the set ‘correct answers.’

1. A ‘correct answer society’ that does not tolerate failure: Who would take a risky 1% chance challenge when failure brands you a ‘dropout’?
2. Misunderstanding ‘Fail Fast’: The essence of ‘fail cheaply and smartly to learn quickly’ is lost, turning into reckless ‘just do it’ behavior.
3. Concentration and winner-takes-all shadows: Money and talent flock only to one or two promising places, drying up the soil where innovative ’tails’ could grow.

The key is balance: between strong execution to grow the ‘body’ and flexibility to let the ’tail’ grow. Everything depends on how we create a system that allows failure but thoroughly learns from it.

Chapter 5: A New Playbook for Korean Innovators

So what should we do? Break the fear of failure and create a new game rule for a land where ’tails’ can grow freely.

Principles for Leaders and Organizations

• Principle 1: Praise the ‘process,’ not the result. Ask “What did you learn from the process?” instead of “Why did you fail?”
• Principle 2: Create a safe zone where ‘failure is okay.’ The best teams share ‘psychological safety.’ The belief that failure won’t be punished breeds innovation.
• Principle 3: Officially allocate a ‘failure budget.’ Like Amazon, set aside part of the budget for ‘innovation experiments’ to find future ’tails.’

Principles for Individuals

• Principle 1: Survival is paramount. Stay alive. Since you never know when the ’tail’ will hit, the most important thing is to survive in the game until opportunity comes.
• Principle 2: Diversify your life. Spend 10–20% of your time learning new things, doing side projects, or meeting people from other fields. Plant various lottery tickets throughout your life.
• Principle 3: Record failure as ’tuition,’ not ’loss.’ Your experience of failure becomes a unique asset that dramatically increases your next success probability.

Epilogue: Courage Toward the Tail

The world has always been moved by a tiny number of unpredictable ’tail’ events: printing press, steam engine, internet, and AI revolution. All began as bold bets that seemed crazy at first.

‘Tails You Win’ is not just a money-making technique. It is wisdom for living in an age of uncertainty and courage to keep going despite countless failures.

Korean society stands at a crucial crossroads. Will we settle for past success formulas, or will we build a courageous culture that embraces failure and nurture the great ’tails’ that will lead the future?

Are you ready to endure 99 failures? Do you have the patience to survive and catch that one ’tail’ that will change your life?

What shakes the world is not the massive body, but your small yet powerful ’tail.’