What Punch-Out Taught Me About Getting Crushed

I remember sitting crosslegged on the floor watching my friend Josh play Mike Tyson’s Punch-Out!! on the NES. And I felt terrible. Not the kind of slight jealousy you feel when someone else is naturally better than you at something. Something much deeper, down in my stomach. Because his score wasn’t twice mine –it was 100X. And for a brief second I thought Josh must be 100x better than me at everything.

We were playing the same game. Same computerized opponent. Same punches. But the outcomes weren’t even close. At the time, I didn’t have language for how I felt. I just knew it felt bad in a way I couldn’t quite explain—like I wasn’t good enough to play in the same game, the same system.

Punch-Out doesn’t reward you in a straight line. A normal hit earns a handful of points, but a well-timed move earns a star, and a star punch explodes your score. A knockdown pushes it even further. Small differences in timing, knowledge, and rhythm don’t produce small differences in results. They multiply like an earthquake. If you know what you’re doing, you’re not getting a little more—you’re getting 50 times more. 100 times more. You might even get a 1000 bagger.

There’s a name for this kind of curve… I didn’t know it then, but I was experiencing one.

Most of us intuitively expect the world to behave differently. We expect effort and outcome to move together, more or less proportionally. Josh spends more hours playing Punch-Out – works a little harder, gets a little more. Improves a bit, sees incremental progress. That’s the model our brains are comfortable with. It’s predictable. It feels fair.

But a lot of modern systems don’t work that way. They follow a different curve—one where a small number captures a massive share of the results, and everyone else is left dividing what remains. You see it in games, where elite players dominate scoreboards. You see it in attention, where a handful of creators capture views. You see it in markets, where a few participants can sometimes move prices in ways that feel disconnected from everyone else’s reality.

What makes this hard isn’t just inequality. It’s mental discontinuity. It’s the feeling that the gap between you and someone else isn’t something you could reasonably close. Their outcome doesn’t feel like a stretched version of yours—it feels like a different video game altogether.

Housing makes this especially clear. You save, you budget, you stretch your assumptions and run the numbers again. You get closer, slowly, over time. And then someone shows up and puts three million dollars cash down on a house and is prepared to drop another 500K while fixing it up and living at their current place.

Not because they optimized slightly better or made marginally better decisions, but because they’re operating on a completely different part of the curve. They’re not growing at a constant rate, but they are growing naturally - scaling multiplicatively - like Josh’s well-timed jumping punches.

The uncomfortable truth is that there don’t need to be many of those people. There just needs to be enough. Enough to win the bid. Enough to set the price. Enough to define what the market becomes. In a power law system, the top doesn’t just win—it sets the terms.

That’s why affordability can feel so hopeless. It’s not simply that prices are high. It’s that the benchmark isn’t being set by the median buyer. It’s being set by the tail—the outliers, the long tail of people with disproportionate resources, whether from software, equity, or inherited wealth. If even a small number of buyers can operate at that level, they can shift the entire landscape.

Looking back, what I felt watching Josh play wasn’t just envy or frustration. I had lost to Josh by a hair in the half mile and while I wasn’t happy, this was different, this was confusion. I was reacting to a gap that didn’t feel bridgeable, to a system where effort didn’t translate into outcome in a way that made intuitive sense to someone who didn’t want to play hours of puch-out a day. I gotta to give props - Josh did. I was reacting to scale. 

We experience that same feeling all the time now, even if we don’t recognize it. The scoreboard is everywhere, and it’s always updating. But the deeper issue isn’t just that we’re measuring everything—it’s the shape of what we’re measuring.

If the world were linear, comparison would still sting, but it would at least make sense. In a power law world, comparison doesn’t just sting—it distorts. It can make hard work feel invisible, progress feel insignificant, and distance feel effectively infinite.

Once you see that, something shifts. You start to understand that the problem isn’t always your effort, discipline, or your decisions. Sometimes it’s the scoreboard. And sometimes it’s how you understand the scoreboard.

Either way, the score isn’t linear.

And you're not crazy.

Money is weird.