Overview

Why this framework exists

Galloway argues that the industry, employer, and macro cycle you choose matter more than your individual talent. Someone of average talent at Google has done better over the past decade than someone great at General Motors. The framework involves evaluating waves (macro trends, industry growth), looking for scalable compensation tied to profits or equity, timing economic cycles (recessions produce the best startups), and leveraging government investments and fallow assets. Choose the biggest, best-positioned wave, then focus your talent on riding it well.

Core principles

5 total

The industry and macro cycle you choose matter more than your individual talent, so picking the wave is the highest-leverage decision.
Average performance in a fast-growing sector will outperform exceptional performance in a declining one over any meaningful time horizon.
Scalable compensation tied to profits or equity multiplies the value of effort in ways that fixed salaries structurally cannot.
Recessions compress asset prices and shake out weak competitors, which makes them unusually productive times to launch or enter a market.
Positioning yourself to benefit from government investment and fallow assets is a form of leverage that requires no additional skill.

Steps

4 steps

Map the macro landscape for growing industries
Identify industries experiencing secular growth trends with strong tailwinds. Look for sectors where revenue is expanding faster than the economy overall, where technology is creating new value, or where demographic shifts are driving demand. Avoid industries in structural decline regardless of how interesting they seem.
Evaluate compensation scalability in target roles
Assess whether compensation in your target role scales with company success. Prioritize roles with equity participation, profit-sharing, commission structures, or bonus plans tied to business outcomes. Industries that scale through software or capital rather than human labor offer better leverage.
Assess the supply-demand dynamics for talent
Research how many people are competing for roles in your target industry. Passion industries (media, entertainment, sports) have chronic oversupply. Technical fields and less glamorous sectors often have undersupply, which gives workers more leverage on compensation and working conditions.
Consider the economic cycle and geographic arbitrage
If you are considering entrepreneurship, recessions create favorable conditions. For employment, evaluate whether relocating to a lower-tax state could save 10%+ of gross income annually. Geographic flexibility is a weapon young people have that older, more rooted peers do not.

Examples

1 cases

Galloway's e-commerce wave across two companies

Galloway chose the e-commerce wave in the late 1990s. Red Envelope, his first company, failed slowly over a decade, draining most of his net worth. But because he was on the right wave, he started L2, a digital strategy consultancy, and it succeeded. He describes himself as a mediocre surfer on a massive wave, with the wave doing most of the work.

OutcomeThe strength of the macro trend (digital commerce) gave Galloway multiple chances to succeed. Had he chosen a declining industry, even excellent execution would not have produced the same results.

Common mistakes

2 traps

Choosing an industry based on how it looks from the outside

Galloway warns that the line of people waiting outside to get into the media store is too long. Attractive-looking industries systematically underpay because supply of eager workers exceeds demand. The MeToo movement concentrated in media precisely because the power dynamic was so skewed by oversupply.

Dismissing the corporate path as selling out

Galloway notes that a colleague who stayed at Morgan Stanley ended up in a similar economic position with substantially less stress and volatility than Galloway's entrepreneurial path. U.S. corporations are the greatest wealth generators in history, and working at one is a legitimate, often superior, path to wealth.

Origin story

How this framework came to be

Galloway argues that the industry, employer, and macro cycle you choose matter more than your individual talent. Someone of average talent at Google has done better over the past decade than someone great at General Motors. The framework involves evaluating waves (macro trends, industry growth), looking for scalable compensation tied to profits or equity, timing economic cycles (recessions produce the best startups), and leveraging government investments and fallow assets. Choose the biggest, be