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What Is 'Status Malfunction'?

• The more attractive an option looks in terms of status, the more likely it is to have significant drawbacks, and the more likely you are to ignore or undervalue those drawbacks and pursue that option anyway.
• Making decisions based on status considerations can lead to Malinvestment.
• Status Malfunction can be a way to identify opportunities that other people overlook.

Josh Kaufman Explains 'Status Malfunction'

Competition for Social Status is often extreme. The greater the potential perceived status increase, the higher the risk of serious error or Malinvestment.

I call this tendency Status Malfunction: the more attractive an option looks in terms of status, the more likely it is to have significant drawbacks or pitfalls (given extreme competition for that status), and the more likely you are to ignore or undervalue those drawbacks and pursue that option anyway.

Let’s go back to the Olympic medal example from our discussion of Status Signals. Everyone pays attention to the gold medalists and ignores that fact that most Olympic hopefuls struggle to pay their day-to-day living expenses. Maintaining an intense training schedule is often not compatible with running a business or holding down a full-time job, and sponsorship opportunities are limited.

To the victors go the spoils, both in terms of status and financial opportunities like sponsorships: for the rest of the field, the price of being ready for competition is monetary hardship and an uncertain future.

I happen to know several performers who grace Broadway stages. The benefits of that path are easy to see: if you’re cast in a leading role, you literally have your name in lights, perform in front of tens of thousands, and have the opportunity to build a legion of adoring fans. The drawbacks are often underappreciated by novices: the vast majority of auditions will lead to rejections, every project is speculative, pursuing one opportunity might remove you from consideration for others, and the demands of the work make it challenging to support a family.

If you land a role, you’ll find producers have most of the Power because there are other actors willing to take your place: their Next Best Alternative is always better than yours, which reduces your negotiating power. Even in the best cases and at the highest levels, shows have limited runs: no matter how well you perform, you’ll be unemployed and looking for a new gig in a few months. It’s a glamourous life, but it’s also a difficult one.

The same dynamic exists for performers of all kinds: there are more people willing to do the work than there are positions to fill. It’s a winner-take-all market, and there are only a few temporary winners at any given time.

That’s not to say that you should never compete for high-status roles: for the winners, the benefits can be quite substantial. Understanding Status Malfunction helps you take a mental and emotional step back from the Mystique of status, examine your options and potential opportunities with a clear mind, and understand the day-to-day realities of what you’re getting yourself into before you commit.

Status Malfunction is also a way to identify opportunities that other people overlook. As I mentioned in the section on the Mercenary Rule, businesses like trash disposal, plumbing, and oil extraction aren’t high status, but they can be quite lucrative. Many fortunes have been built by entrepreneurs and business owners willing to do high-quality work in low-status markets.

There are millions of ways to get better results in important areas of life if you’re willing to ignore alluring distractions and focus on doing what works.

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"Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so."

Douglas Adams, humorist and author of the Hitchhiker’s Guide series

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