The Illusion of Performance: Why Learning, Not Optimization, Builds Resilience

In today's world, we’re obsessed with performance. We measure everything—every step, every second, every metric—chasing an elusive ideal of optimization. Society has set benchmarks everywhere, whispering to us that the path to success is through minimizing risk and maximizing return. But what if I told you that this obsession with performance, this relentless pursuit of stability and optimization, is leading us into a dangerous illusion?

Our thinking, especially in the financial world, revolves around minimizing volatility to secure higher returns. It’s the bedrock of traditional portfolio theory: given a certain level of risk, aim to extract the maximum gain. But by treating uncertainty as the enemy, we miss out on one of life’s most powerful sources of growth—learning. When we avoid volatility, we also avoid resilience, trading the chance to adapt for the comfort of control. And in the words of Nassim Taleb, we lose our "antifragility," our ability to grow stronger in chaos.

The Perils of Performance Society

In this "performance society," optimization has become an end in itself, seducing us with a mirage of stability and control. We chase benchmarks, trying to meet or exceed them, and in doing so, we lose the opportunity to live a life with diverse representations—a life where growth is driven not by comfort but by the willingness to embrace the unknown.

The real question isn’t about how volatile a company—or a life—is; it’s about whether it’s learning enough to survive the future. In both biology and markets, learning is the ultimate strategy that defines survival. Evolution itself is a grand experiment in adaptation, with genetic codes and neural networks shaped by our interactions with our environment, social systems, and cultures.

Macrowise's Taxonomy of Archetypes

Performance Vs Learning. Y - Axis Performace , X- Axis Learning.

At Macrowise, we’ve developed a taxonomy that categorizes archetypes based on their capacity to learn versus their performance. These archetypes give us a framework to understand both financial markets and life itself as an evolutionary learning process. And we’ve focused on two critical charts that define each archetype: one showing performance versus learning, and the other showing how volatility evolves over time.

1. The Zombie: This archetype represents the company—or individual—that clings to the status quo. It’s the entity that’s been doing the same thing for years, favoring stability over growth. Zombies have low performance and low learning, finding comfort in the predictable. Yet, this stability is a trap. Over time, their resistance to learning makes them vulnerable to obsolescence or even collapse when they inevitably face extreme volatility.
2. The Dragonfly: Here lies the archetype of high learning. The Dragonfly embraces constant transformation, navigating high volatility to unlock continuous growth. Though it may not boast the highest performance, its adaptability ensures longevity. From the outside, the Dragonfly doesn’t fit into traditional models of high performance and low volatility—but that’s precisely what gives it its strength.
3. The Rockstar: The Rockstar has learned, consolidated, and now enjoys a dominant position. Its performance is high, and its volatility curve shows a steady, predictable pattern. This archetype represents those who, through learning, have minimized uncertainty and now shine as masters of their craft.
4. Icarus: The final archetype is Icarus, the peak performer with a low capacity for learning. Though Icarus achieves extreme success, this high performance is often short-lived, with a crash looming on the horizon. Lacking resilience, Icarus is vulnerable to the forces of change.

Traditional finance encourages us to invest in Zombies and Icaruses, drawn to their promise of low volatility and high returns. Yet ironically, these archetypes also minimize learning, undermining the potential for long-term resilience in our investments.

From Zombie to Rockstar: The Human Journey

In life, we shift between these archetypes. We’re Zombies when we choose security over growth, giving up the opportunity to learn. We become Dragonflies when we’re willing to embrace discomfort, taking losses that reveal critical insights and expanding our understanding of reality. Through this process, we transform into Rockstars, mastering our craft with fewer disruptions and controlled cycles of volatility. But even Rockstars can fall prey to hubris, like Icarus, forgetting that the world changes and new competitors rise.

We’re seduced by two illusions: one of stability and control, and the other of rapid performance at any cost. The first leads us down a slow path toward obsolescence, while the latter thrusts us into a roller coaster of temporary highs and crushing lows.

The Ultimate Survival Strategy

In the end, the strategy for long-term survival is not optimization—it’s learning. If we become skilled at learning, we’re resilient. We understand that nothing is stable, that control is fleeting, and that impermanence is a constant companion. When we embrace learning, we can accept both low performance and moments of loss as powerful teachers that push us higher.

Security and performance are illusions. It’s learning that liberates us, gives us purpose, and ultimately, keeps us alive.

Thanks for reading,

Guillermo Valencia A

Cofounder of Macrowise

November 4th, 2024