Not every big talent becomes a big star

Putting all your eggs in one basket has enormous upside if you pick the right basket.  But a bad solo choice is devastating.  That’s why diversification makes so much sense. 

Enron has often been used as a primary example of why such diversification is important. Many Enron employees had 100 percent allocations to company stock in their defined contribution plans (at the end of 2000, 62 percent of the value of employee 401(k) plans were held in Enron stock) and were financially crushed when the company’s fraudulent practices and dreadful leadership were brought to light as the company went belly up in 2001.

But the potential for fraud and bad management are not the only reasons to diversify.  Sometimes good ideas – even great ideas – end up not working out desite the best of intentions and diligent effort. An investment that seems to have all the necessary elements of success can fail and fail miserably. I’ll try to make my case in this regard by using some terrific rock and roll from my high school days.      

This song, September Gurls, by the early 1970s Memphis rockers Big Star, is rated by Rolling Stone magazine as the 180^th greatest song of all-time.  But the band weren’t one-hit wonders – on multiple levels.  The song Thirteen was rated #406 by the Rolling Stone. Indeed, Big Star’s three albums were all rated by Rolling Stone as among the best 500 ever (Radio City is #405; #1 Record comes in at #434; Third at #449) and all received widespread critical acclaim.  But most fundamentally, despite rave reviews and clear expectations of commercial success, the band never even had one hit and never sold many records.

What Big Star were is great.  As Rolling Stone puts it, “Big Star‘s combination of Beatles-style melody, Who-like punch, and Byrds-ish harmonies defined power pop before the term (or an audience for it) existed. In less than four years, Big Star created a seminal body of work that never stopped inspiring succeeding generations of rockers, from the power-pop revivalists of the late 1970s to alternative rockers at the end of the century to the indie rock nation in the new millennium.”  Among the long list of those who were strongly influenced by Big Star are The Replacements, The Bangles and R.E.M.  That ’70s Show adopted the music from the band’s song, In the Street, as its title theme, using a cover version recorded by Cheap Trick.

That Big Star never made it big remains a fascinating mystery. NPR called them “the unluckiest band in America.” Atlantic magazine says they are “the greatest thing you’ve never heard.” And a feature-length documentary about the band has just been released to chronicle the greatness we missed.

We like to think that a terrific product will always be in demand.  But reality is far more complicated than that. Not every big talent becomes a big star.  Big Star suffered from label and distribution problems as well as perhaps being ahead of its time, as harder-edged blues rock was all the rage during the early 70s. Power pop came years later. But far lesser bands have overcome more. Whatever the reasons, Big Star demonstrates that greatness need not be rewarded.  No matter how great a company or its products are, success is never assured.  That’s another reason why diversification is so important. You can do everything right and still come out wrong.