You’re still a young’un. You have a good 30-40 years ahead of you. Do you really want to spend the next few decades wishing you had taken more risks when you were only 40? If not, start betting!
I read this post years ago, just after taking a job leading operations at a tech company that had just raised its Series A. It wasn't my first rodeo, and it won't be my last. TLDR - it got big and then failed. One thing to add to this idea of asymmetric bets is HOW you take them. Work is only a part of life. It provides purpose and income. Other things provide purpose, like family. And income can come from investing. Before taking asymmetric career bets, consider what is important to you. If starting a family is important to you in your 30s, it may not be the best time to start a company.
I took a huge cut in income taking the job I did in 2019. But I could because I started investing aggressively in public markets in 2010 when I was 25. I started with small investments, then made larger ones, then added Long-Term Equity Anticipation Securities (LEAPS). Most people I spoke to about investing thought I was crazy. Options were tantamount to crypto, even though I was buying long-dated contracts in blue-chip companies with secular growth like Apple, Amazon, Chipotle, Costco, Tesla, and Starbucks. I also learned how to evaluate companies and differentiate fads from trends because I was very motivated to listen to earnings calls and read annual reports. These early asymmetric financial bets enabled me to manage my career the way I wanted without the risk of financial ruin.
This isn't intended to be a comment about investing, but having wealth does make it easier to take career risks. This original post advocates taking career risks early by starting companies. I might argue that aggressively investing income from one of those early consulting jobs to establish financial freedom is a great strategy before you start your company. It will enable you to bootstrap or raise a small seed from friends and family.
The premise of this post is good, but I am struggling to see how the examples really apply. Making money by being into crypto early was luck, not some kind of asymmetric bet on oneself. Surely there are better examples of young entrepreneurs doing something risky that pays off.
I love that Substack surfaces 4 year old posts (have been on an optionality reads binge). Thanks for sharing your thoughts on avoiding continual optimization for optionality and taking those asymmetric bets
At 20 you can do such things if you have money to fall back on and to help you if things go wrong - many non rich people can’t take chances at 20 and will find it easy to take chances at 30 once they got some of their own money together
Sam, Always take Asymmetric Bets, play long term games. The Upside should be high and downside limited, risk a little to win a lot, lose frequently small amounts but play those games, you will win big at the end. Look for asymmetrical Opportunities.
This is fantastic. I hadn't come across your writing before, but will be following religiously now. As a soon-to-be grad, I will be sending this to as many of my peers as I can. Thanks Erik.
The question is, should I still take asymmetric bets? I have just turned 40, and I am not afraid to fail or worried about reputational risk.
Take micro-bets. Do a side hustle that involves you taking asymetric bets in public.
My initial comment was 2 years ago. I took asymetric bets and they paid off 🚀
Congratulations! I hope you cointinue taking more bets and I hope they continue to pay off. All the best!
You’re still a young’un. You have a good 30-40 years ahead of you. Do you really want to spend the next few decades wishing you had taken more risks when you were only 40? If not, start betting!
I don't know, if you have kids and a wife you might not want to do something too stupid...
A very late reply with update. I have kids, but a very supportive wife. That's why decided to take asymmetric bets.
Erik, what an awesome post. Rich and enlightening. Thanks for sharing.
The # of times you bring up rapt.fm i get the feeling you'll be re-launching soon
I have to fulfill the prophecy.
I read this post years ago, just after taking a job leading operations at a tech company that had just raised its Series A. It wasn't my first rodeo, and it won't be my last. TLDR - it got big and then failed. One thing to add to this idea of asymmetric bets is HOW you take them. Work is only a part of life. It provides purpose and income. Other things provide purpose, like family. And income can come from investing. Before taking asymmetric career bets, consider what is important to you. If starting a family is important to you in your 30s, it may not be the best time to start a company.
I took a huge cut in income taking the job I did in 2019. But I could because I started investing aggressively in public markets in 2010 when I was 25. I started with small investments, then made larger ones, then added Long-Term Equity Anticipation Securities (LEAPS). Most people I spoke to about investing thought I was crazy. Options were tantamount to crypto, even though I was buying long-dated contracts in blue-chip companies with secular growth like Apple, Amazon, Chipotle, Costco, Tesla, and Starbucks. I also learned how to evaluate companies and differentiate fads from trends because I was very motivated to listen to earnings calls and read annual reports. These early asymmetric financial bets enabled me to manage my career the way I wanted without the risk of financial ruin.
This isn't intended to be a comment about investing, but having wealth does make it easier to take career risks. This original post advocates taking career risks early by starting companies. I might argue that aggressively investing income from one of those early consulting jobs to establish financial freedom is a great strategy before you start your company. It will enable you to bootstrap or raise a small seed from friends and family.
Excellent article Erik. Reminds me of Nassim Taleb's Antifragile.
so good
The premise of this post is good, but I am struggling to see how the examples really apply. Making money by being into crypto early was luck, not some kind of asymmetric bet on oneself. Surely there are better examples of young entrepreneurs doing something risky that pays off.
I love that Substack surfaces 4 year old posts (have been on an optionality reads binge). Thanks for sharing your thoughts on avoiding continual optimization for optionality and taking those asymmetric bets
Not that simple…
At 20 you can do such things if you have money to fall back on and to help you if things go wrong - many non rich people can’t take chances at 20 and will find it easy to take chances at 30 once they got some of their own money together
Sam, Always take Asymmetric Bets, play long term games. The Upside should be high and downside limited, risk a little to win a lot, lose frequently small amounts but play those games, you will win big at the end. Look for asymmetrical Opportunities.
This is fantastic. I hadn't come across your writing before, but will be following religiously now. As a soon-to-be grad, I will be sending this to as many of my peers as I can. Thanks Erik.