Chapter 7

MOMENTUM

“Depressed Billionaires”

I.

In January 2010 Paul “Bear” Vasquez, a burly, cheerful man who lived just outside of Yosemite National Park in central California, posted a home video to the website YouTube. A handful of people saw it.

Six months later, late-night television host Jimmy Kimmel discovered the clip and shared it on Twitter, calling it “the funniest video in the world.”

A fad ignited. Kimmel’s fans watched and shared, and the dormant video instantly shot to 1 million views. Within two weeks, it hit 5 million. Kimmel invited Vasquez to appear on his show, further boosting the video’s exposure. Suddenly the video was being spoofed on Cartoon Network and College Humor, parodied by Jimmy Fallon and indie musician Amanda Palmer, and auto-tuned by the infamous Internet comedians the Gregory Brothers.

If you had an Internet connection and lived in North America at the time, you may have seen it. Vasquez is the man behind the “Double Rainbow” video, which at last check had 38 million views. In the clip, Vasquez pans his camera back and forth to show twin rainbows he’d discovered outside his house, first whispering in awe, then escalating in volume and emotion as he’s swept away in the moment. He hoots with delight, monologues about the rainbows’ beauty, sobs, and eventually waxes existential.

“What does it mean?” Vasquez crows into the camera toward the end of the clip, voice filled with tears of sheer joy, marveling at rainbows like no man ever has or probably ever will again. It’s hard to watch without cracking up.

That same month, the viral blog BuzzFeed boosted a different YouTuber’s visibility. Michelle Phan, a 23-year-old Vietnamese American makeup artist, posted a home video tutorial about how to apply makeup to re-create music star Lady Gaga’s look from the recently popular music video “Bad Romance.” BuzzFeed gushed, its followers shared, and Lady Gaga’s massive fanbase caught wind of the young Asian girl who taught you how to transform into Gaga.

Once again, the Internet took the video and ran with it. Phan’s clip eventually clocked in at roughly the same number of views as “Double Rainbow.”

These two YouTube sensations shared a spotlight in the same summer. Tens of millions of people watched them, because of a couple of superconnectors.

So where are Vasquez and Phan now?

Bear Vasquez has posted more than 1,300 videos now, inspired by the runaway success of “Double Rainbow.” But most of them have been completely ignored. After Kimmel and the subsequent media flurry, Vasquez spent the next few years trying to recapture the magic—and inadvertent comedy—of that moment. But his monologues about wild turkeys or clips of himself swimming in lakes just don’t seem to find their way to the chuckling masses like “Double Rainbow” did. He sells “Double Rainbow” T-shirts. And wears them.

Today, Michelle Phan is widely considered the cosmetic queen of the Internet, and is the second-most-watched female YouTuber in the world. Her videos have a collective 800 million views. She amassed 5 million YouTube subscribers, and became the official video makeup artist for Lancôme, one of the largest cosmetics brands in the world. Phan has since founded the beauty-sample delivery company Ipsy.com, which has more than 150,000 paying subscribers, and created her own line of Sephora cosmetics. She continues to run her video business—now a full-blown production company—which has brought in millions of dollars from advertising. She’s shot to the top of a hypercompetitive industry at an improbably young age. And she’s still climbing.

Bear Vasquez is still cheerful. But he’s not been able to capitalize on his one-time success. Michelle Phan could be the next Estée Lauder.

This chapter is about what she did differently.

II.

In the late 1990s, the Internet created thousands of millionaires—and a handful of billionaires—in Silicon Valley. Many entrepreneurs who rode the wave early and bailed out before it crashed in the early aughts suddenly found themselves in an unfamiliar position: having worked 80-hour weeks at Internet startups for the past few years, they now no longer needed to work at all. Ever. For the millionaires, smart financial planning meant a comfortable life and the freedom to pursue new things. For the billionaires, champagne baths every morning and new Lamborghinis every afternoon couldn’t deplete the fathomless amount of cash on hand. “Your entire philosophy of money changes,” writes author Richard Frank in his book, Richistan. “You realize that you can’t possibly spend all of your fortune, or even part of it, in your lifetime, and that your money will probably grow over the years even if you spend lavishly.”

There are dotcom entrepreneurs who could live top 1 percent American lifestyles and not run out of cash for 4,000 years. People who Bill Simmons would call “pajama rich,” so rich they can go to a five-star restaurant or sit courtside at the NBA playoffs in their pajamas. They have so much money that they have nothing to prove to anyone.

And many of them are totally depressed.

You’ll remember the anecdote I shared in this book’s introduction about being too short to reach between the Olympic rings at the playground jungle gym. I had to jump to grab the first ring and then swing like a pendulum in order to reach the next ring. To get to the third ring, I had to use the momentum from the previous swing to keep going. If I held on to the previous ring too long, I’d stop and wouldn’t be able to get enough speed to reach the next ring.

This is Isaac Newton’s first law of motion at work: objects in motion tend to stay in motion, unless acted on by external forces. Once you start swinging, it’s easier to keep swinging than to slow down.

The problem with some rapid success, it turns out, is that lucky breaks like Bear Vasquez’s YouTube success or an entrepreneur cashing out on an Internet wave are like having someone lift you up so you can grab one of the Olympic rings. Even if you get dropped off somewhere far along the chain, you’re stuck in one spot.

Financial planners say that this is why a surprisingly high percentage of the rapidly wealthy get depressed. As therapist Manfred Kets de Vries once put it in an interview with The Telegraph, “When money is available in near-limitless quantities, the victim sinks into a kind of inertia.”

Wait—the victim? We’re calling the courtside pajama guy a victim?

It’s hard to feel entirely sorry for him, but in a sense, yes. Life has stopped moving forward. When businesspeople cash out big, says wealth coach Susan Bradley, “Momentum has been building for a while. Then there’s this moment that it’s over, and all the champagne is gone, and there’s this feeling of this drop into an abyss. It’s like the beams of a house have gone away and you have to build from the inside out. That sense is paralyzing. It actually affects our cognitive functioning.”

I’m pretty sure that acquiring a billion dollars would solve all my problems. However, studies show that the wealthy—especially those who fall into it through inheritance or the lottery or sale of a business—are often not happier once they’re rich. A meaningful percentage of them believe that their wealth causes more problems than it solves.

If you want to get really depressed about success, look at what happened to the heroic astronauts of the 1960s and ’70s. Buzz Aldrin, the second man to set foot on the moon, returned home from the historic Apollo 11 mission and became an alcoholic. Severely depressed, his life unraveled. Aldrin burned through three marriages and wrote two memoirs about his misery. Neil Armstrong, the man who stepped out of Apollo 11 just ahead of Aldrin, spent his next few decades figuring out what to do with his life. He briefly taught some small classes at a university, then quit unexpectedly. He consulted a little for NASA and some random companies, and did a commercial for Chrysler, and quit all those things, too. He hid from autograph seekers and sued companies for using his name in ads.

There were certainly multiple factors contributing to these men’s post-moonwalk slump, but the question What do you do after walking on the moon? became a gigantic speed bump.

The trouble with moonwalkers and billionaires is when they arrive at the top, their momentum often stops. If they don’t manage to find something to parlay, they turn into the kid on the jungle gym who just hangs from the ring.

Not coincidentally, this is the same reason that only one-third of Americans are happy at their jobs. When there’s no forward momentum in our careers, we get depressed, too.

As Newton pointed out, an object at rest tends to stay at rest.

So how does one avoid billionaire’s depression? Or regular person’s stuck-in-a-dead-end-job, lack-of-momentum-fueled depression?

Harvard Business School professor Teresa Amabile took on the question in the mid-2000s in a research study of white-collar employees. She tasked 238 pencil pushers in various industries to keep daily work diaries. The workers answered open-ended questions about how they felt, what events in their days stood out. Amabile and her fellow researchers then dissected the 12,000 resulting entries, searching for patterns in what affects people’s “inner” work lives the most dramatically.

The answer, it turned out, is simply progress. A sense of forward motion. Regardless how small.

And that’s the interesting part. Amabile found that minor victories at work were nearly as psychologically powerful as major breakthroughs. To motivate stuck employees, as Amabile and her colleague Steven J. Kramer suggest in their book, The Progress Principle, businesses need to help their workers experience lots of tiny wins. (And as we learned from the bored BYU students in chapter 1, breaking up big challenges into tiny ones also speeds up progress.)

This is helpful to know when motivating employees. But it also hints at what billionaires and astronauts can do to stave off the depression that follows the high of getting to the top.

To get out of the funk, say Joan DiFuria and Stephen Goldbart, cofounders of the Money, Meaning & Choices Institute, depressed successes simply have to start the Olympic rings over. Some use their money to create new businesses. Others parlay sideways and get into philanthropy. And others simply pick up hobbies that take time to master. Even if the subsequent endeavors are smaller than their previous ones, the depression dissipates as they make progress.

They don’t have to do something Bigger or Better to be happy. They just have to keep moving.

Not every astronaut struggled postspace like Buzz Aldrin did. Several parlayed sideways rather than stopping their momentum. Earth orbiter John Glenn went into politics. Alan Shepard, America’s first man in space and the fifth to stand on the moon, became a successful businessman. Alan Bean, who moonwalked in the Apollo 12 mission, became a painter. And Apollo 15 spaceman James Irwin found fulfillment in helping others as a minister. Each parlayed his momentum into something that kept the wheels of life turning.

Happy astronauts catch waves that lead to the moon, and then use the momentum to switch ladders to fulfilling careers on earth. Depression-avoidant entrepreneurs use levers to get massively rich, then parlay the momentum to build more things. But when Bear Vasquez tried to parlay his momentum for more, he got nowhere.

What did he do wrong?

III.

I hope you’ll indulge me for a moment while I describe one of my favorite indulgences. It’s a cookie: two layers of textured chocolate with a layer of confectionery cream between them. Alone, the cookie is fine, but when dunked into milk, it’s magic. I can eat ten in one sitting. In fact, before I realized that metabolism is exhaustible (at some point in my twenties), I routinely ate entire packages of them.

I’m talking, of course, about the Oreo, the sandwich cookie created in 1912 that one (albeit rather dubious) study claims is as addictive as cocaine. My intense affection for Oreos went a bit stale, however, in the winter of 2013, when all of a sudden, the entire advertising industry started talking about Oreos and refused to shut up.

It was February 3, and the Baltimore Ravens were facing the San Francisco 49ers in America’s most televised event of the year, the Super Bowl. Seventy-three thousand fans screamed from the bleachers of the Mercedes-Benz Superdome in New Orleans, while millions more screamed from couches around the country. For two hours, several large, sweaty men crashed into each other on a big patch of grass. Baltimore managed to score 28 points to San Francisco’s 6 by the third quarter. And then, without warning, the Superdome lights went out.

Maintenance crews and stadium officials scrambled to get the power back on while players, coaches, fans, and couch potatoes waited in the dark for 34 minutes.

During the blackout, the Twitter user @Oreo sent a status update. A picture of a dark room lit up by a solitary cookie. Caption: You can still dunk in the dark.

Fifteen thousand Super Bowl fans, with nothing else to do while they waited for the game to resume, retweeted, or shared, @Oreo’s picture. Another 20,000 fans “Liked” it on Facebook. And then the lights came back on, and one of the teams of sweaty men beat the other one.

@Oreo’s tweet was clever. It was the most popular tweet of the event, in fact. But for perspective, 35,000 people is only three hundredths of 1 percent of the 108.69 million people who watched the Super Bowl. “Dunk in the Dark” was dramatically outviewed by every one of the television advertisements that aired during commercial breaks.

And yet.

Months later that Oreo tweet, now chiseled into the stone tablets of history as the Oreo tweet, received a truckload of awards and trophies, including two Clios. Not because the ad was amazingly designed. And not because more potential Oreo buyers saw the tweet versus Oreo’s Super Bowl TV commercial. But because Oreo managed to harness momentum with it and smother the insular advertising industry with its story.

The momentum started when the tech blogs caught wind of the tweet. On game day, BuzzFeed wrote about the tweet in a post that earned 400,000 views. CNET and a handful of others wrote as well. The next day, Mashable posted an article titled, “Someone Give This Oreo Employee a Raise.” That story itself was also likely viewed more times than the actual tweet.

Then the Chicago Tribune and Washington Post wrote about it. Advertising Age and Adweek wrote about how everyone else was writing about it. The frenzy of media coverage resulted in what Oreo’s advertising agency, 360i, claims were 525 million earned media impressions. (“Earned media impressions” is one of those inflated figures agencies tend to use to gauge how many people could have seen something—akin to counting every car that drives by a billboard on the interstate—but 525 million is still a lot.)

Hardly anyone saw the tweet itself, but an enormous number of people heard about it later. And people within the advertising and PR industries didn’t stop hearing about it.

On the surface, the Oreo tweet’s incredible velocity looked like a modern runaway carriage. A corporate version of “Double Rainbow.” It wasn’t until I sat down as a guest judge for Digiday’s digital advertising awards that I discovered the underlying story.

As the other judges and I rifled through submissions from various agencies hoping to be considered for the best advertising of the year, we came across a self-nomination from 360i, arguing that Oreo be considered for the category of best creative. The application boasted about the press coverage the Oreo tweet had received. “Wired magazine declared Oreo as the Super Bowl winner, and Adweek even ranked the tweet as one of the top five ‘ads’ of the night,” 360i wrote.

The agency was invoking Frank Sinatra, leaning on the credibility of bigger and better press and awards in order to parlay for even more awards. Upon inspection, it turns out this was exactly what the agency had done from the moment it sent the tweet. Fifteen thousand retweets is nothing to sneeze at, but our friend Justin Bieber from chapter 2 gets more tweets when he sneezes. (In fact, that same February 3, Bieber received 17,000 retweets for his tweet of, “chill day. off to nyc soon for SNL week!”) But a trade blogger doesn’t necessarily know or care about that. As soon as the Oreo tweet received some traction, 360i folks e-mailed bloggers the stats. When the blogs wrote, the agency made sure the growing story worked its way up the chain to bigger writers and publications, continuing to escalate things by making all the press coverage (earned media impressions) the story, rather than the relatively low number of Twitter shares. And so on, until the Cannes International Film Festival handed 360i a Silver Lion, and I, the ten-Oreos-at-a-time guy, felt I had to deliver an impassioned speech to the other Digiday judges about how that picture of an Oreo cookie on a black background was actually pretty run-of-the-mill creative work.

Didn’t matter. Oreo’s momentum had already taken it into orbit. My fellow judges voted Oreo the winner. I threw my hands up, then bought a pack of Oreos to console myself.

MOMENTUM ISN’T JUST A powerful ingredient of success. It’s also a powerful predictor of success.

Eric Paley, a successful entrepreneur (he sold his dental imaging company, Brontes, for $95 million in 2006) and managing partner of the venture capital fund Founder Collective,^* illustrates how this principle works in finance. A few years ago, two of his companies went out to raise money from new investors. They were in the same general industry and had the exact same economics. Each company received offers from investors around the same time, wherein the investors determined how “valuable” each business was.

Below are the basic financials for each company. See if you can guess which got a better deal:

Though they were both operating at breakeven with the same revenues, investors valued Company B at double the price of Company A, simply because Company B had more momentum.

Investors see momentum and future success as so highly correlated that they will take bigger bets on companies with fast-growing user bases even if the companies are bleeding money.

Momentum, it turns out, can cover a multitude of sins.

360I HAD BEEN CLEVER to direct the award judges’ attention away from the Oreo tweet’s absolute economics and toward the momentum the tweet had in the press. And rather than cross their fingers like many of us would, 360i’s publicists had taken the tweet’s initial momentum and pushed it along like sweepers in a curling match.

If 360i hadn’t kept swinging, it certainly would not have won all those Clios.

The Oreo tweet case study proves that the perception of momentum is often as good as momentum. I didn’t personally believe it deserved all the attention it got. And yet, here I am, perpetuating the Oreo tweet even further. That’s the power of momentum.

Now the question is how can we manufacture—and harness—momentum that no one can argue with?

IV.

Michelle Phan grew up in California with her Vietnamese parents. The classic American immigrant story of the impoverished but hardworking parents who toil to create a better life for the next generation was marred, in Phan’s case, by her father’s gambling addiction. The Phan clan moved from city to city, state to state, downsizing and recapitalizing and dodging creditors and downsizing some more. Eventually, Phan found herself sleeping on a hard floor, age 16, living with her mother, who earned rent money as a nail salon worker and bought groceries with food stamps.

Throughout primary and secondary school, Phan escaped from her problems through art. She loved to watch PBS, where painter Bob Ross calmly drew happy little trees. “He made everything so positive,” Phan recalls. “If you wanted to learn how to paint, and you wanted to also calm down and have a therapeutic session at home, you watched Bob Ross.”

She started drawing and painting herself, often using the notes pages in the back of the telephone book as her canvas. And, imitating Ross, she started making tutorials for her friends and posting them on her blog. Drawing, making Halloween costumes, applying cosmetics—the topic didn’t matter.

For three years, she blogged her problems away, fancying herself an amateur teacher of her peers and gaining a modest teenage following. This and odd jobs were her life, until a kind uncle gave her mother a few thousand dollars to buy furniture, which was used instead to send Phan to Ringling College of Art and Design.

Prepared to study hard and survive on a shoestring, Phan, on her first day at Ringling, encountered a street team which was handing out free MacBook laptops, complete with front-facing webcams, from an anonymous donor. Phan later told me, with moist eyes, “If I had not gotten that laptop, I wouldn’t be here today.”

With the webcam—and a portable computer powerful enough to edit video—she parlayed the blog for a YouTube channel, where Phan made her tutorials visual. She filmed herself applying artistic makeup while smiling into the camera, then edited the footage and added Ross-style voiceovers to explain what she was doing.

In 2007 she recorded six makeup tutorial videos. She filmed them in her tiny bathroom. Each received modest views—often in the low thousands. In 2008 Phan recorded six more. Then in 2009 when YouTube announced a program to help artists make a living from their videos, she recorded 54. Phan grew a small but loyal audience. She worked as a waitress at a sushi joint to make ends meet and recorded videos in her spare time, hoping to make some money from advertising.

That same year, 2009, Lady Gaga released her now-iconic “Bad Romance” music video. It quickly became YouTube’s most-watched. Phan decided to capitalize on the wave by posting a tutorial of how to re-create Gaga’s makeup from the video.

Then, like Oreo, she tried to manufacture some momentum. Like a surfer arriving hours before a competition to watch the waves, “I would study the algorithm of YouTube’s front page” for months, Phan says. “I noticed that they only would post up videos with a lot of views [on the home page], and you only have 2 days to capitalize off of all these views.” However, YouTube didn’t update the home page on weekends, she realized. If she managed to get a video on there on a Thursday, “I [could] be there for an extra 2 days.”

So she uploaded her Gaga video at the optimal moment and then notified her little group of fans to watch it at once. It was enough to reach the home page. This was the tiny nudge that got the snowball rolling. And, as the video hung on the homepage for those extra days, a writer from BuzzFeed noticed it and wrote a story about it.

Readers swarmed over to YouTube to watch it.

This is the part where most lucky breakers, like Bear Vasquez, would enjoy the ride until the momentum dissipated.

But instead of fading away after the fad was over, something else happened to Phan’s momentum: the people who watched the Lady Gaga tutorial started watching Phan’s other tutorials—which were excellent. Her unknown older work benefited from the spillover. Scores of the BuzzFeed viewers subscribed to Phan’s channel, eager for more videos. Phan upgraded her camera and started recording.

Phan’s backlog of content allowed her to take the momentum caused by waves and superconnectors and capture it. Those viewers became hers. When she posted more videos, they kept her swinging from ring to ring. And by constantly feeding them with great new content, she transformed her video series into a career and a company.

“Most YouTubers just kind of drop off around a certain time; it’s hard to keep that momentum,” Phan says. “I [had] to strike while the iron’s hot.”

AS WE’VE LEARNED FROM Michelle Phan’s story, the secret to harnessing momentum is to build up potential energy, so that unexpected opportunities can be amplified. On the playground, it’s like building a tower to stand on, so you can start your Olympic ring with more velocity. Phan’s tower was a backlog of quality content. This is how innovators like Sal Khan (who published 1,000 math lessons online before being discovered by Bill Gates, who thrust him into the spotlight and propelled him to build a groundbreaking digital school called Khan Academy), and musicians like Rodriguez (a folk singer whose amazing, but largely unrecognized music work from the 1970s was featured in a 2012 documentary, which then catapulted him to world fame) became “overnight” successes. None of them were overnight successes. But each of their backlogs became reservoirs, ready to become torrents as soon as the dam was removed.

Then there’s Oreo.

The untold portion of the Oreo tweet story, the part that most of the salivating bloggers missed, is what 360i and Oreo did before the Super Bowl. For six months, Oreo had been posting culturally relevant images like “Dunk in the Dark” on Twitter every day of the week. It had slowly built up a following. In the process, Oreo had honed its publishing process, which for big companies was not nearly as simple as writing 140 characters and pressing “Tweet.” This was at a time when social media managers at Fortune 500 companies typically had to brave a phalanx of corporate approvers to publish anything.^*

While building its content backlog, Oreo managed to get its tweet approval process down to a few minutes’ time—just enough time to say, “You can still dunk in the dark” before the Superdome lights came back on—and to grow a following among consumers and press that could kick-start momentum when the company needed it. And that is what won 360i its Cannes and Clios.

PAUL VASQUEZ WASN’T TRYING to make a funny viral video when he filmed “Double Rainbow.” He hadn’t intended to become famous overnight. His video backlog consisted of random home videos of things he’d seen in his yard. When the Internet’s millions barreled down his virtual street, Vasquez was caught staring into the headlights. So, he made a few bucks from advertisements, got to be on TV, and stopped at the second set of Olympic rings, where the superconnectors deposited him.

Michelle Phan, on the other hand, spent years building up potential energy. She worked hard to hone her craft, stealing from the master tutorialist Bob Ross, studying the wave patterns of YouTube’s homepage, and superconnecting with media companies and the fans of famous pop icons by giving and teaching. She hacked the ladder from blogger to YouTube star to makeup spokesperson to cosmetics designer to entrepreneur.

The 30-million-view Lady Gaga tutorial was not Phan’s first great video, but it was her inflection point. She had been winding up for a big swing for a long time.

“Success is like a lightning bolt,” Phan once declared in an interview with Mashable. “It’ll strike you when you least expect it, and you just have to keep the momentum going.”