- Can you imagine this world where Jean-Luc Picard,
the great Captain of the Starship Enterprise
never took any risk?
This is probably what would happen.
- I'd like to talk to you for a moment
about my future on the Enterprise.
- Of course, Lieutenant.
Jean-Luc, isn't it?
- First of all and I would like you
to be absolutely straightforward with me.
How would you evaluate me as an officer?
- Well, your performance records have always been good.
You're thorough, dedicated.
- Steady, reliable.
Punctual.
- I see.
What would you say
if I told you
that I believed that I was capable of being very much more.
- I don't think that's realistic.
- I believe that I can do more.
- Hasn't that been the problem all along?
Throughout your career, you've had lofty goals,
but you've never been willing
to do what's necessary to attain them.
- Would that be your evaluation as well, Commander?
- I think I have to agree with the Counselor.
If you want to get ahead, you have to take chances.
Stand out in a crowd, get noticed.
- I see.
- Now we don't want to lose you.
You're a very good officer.
- Just not one who stands out.
- Man, Jean-Luc never made it past Lieutenant junior grade.
That's crazy.
But that might happen to you if you never take risks.
Today we're going to talk about career risk
for great software engineers, designers, and builders.
Nothing ventured, nothing gained.
Let's get started.
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(dynamic music)
If you know how to code.
If you know how to design,
if you know how to make products that people use,
you're someone who can go to anywhere in the world
and work in any sector and find some way to create value.
I think we are in the very early innings
of this really crazy one-time shift.
Software, eating the world?
It's just getting started, really.
I wish someone came along to me earlier
and said, Garry, because you can make any kind of software,
you should really think about increasing the amount of risk
that you can take
because the only risk for you
is not taking risk at all.
Strange, it's counterintuitive and fundamentally true.
If you're actually really good at doing what you do.
And there are all kinds of ways to do that.
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If you want more risk, here are three ways to get it.
Intrapreneurship, working at a startup,
or starting your own startup.
First, intrapreneurship.
It's the most incremental way
to get more risk in your career.
Look, every business has three phases,
the commandos,
the army,
and the police.
Commandos, like startup founders or early employees,
they parachute in and they establish a beachhead.
Then the army comes in and secures it.
And finally the police hold it down after the fact.
If you're at a big company, you're probably police,
but there are parts of that org
that probably have either new things to work on,
new products or new frontiers.
And those things might actually be the future
of the business overall.
You can always move from a police stage to an army stage.
And if you're lucky, there are parts of a company
that you already work at
that are tackling brand new problems.
Maybe you can even go full commando.
Second, working at a startup.
There are lots of ways to find startups to work at,
but my favorite kind is to look into your own life
and see what you find interesting.
If you find a job that you actually really like,
it's like finding five extra days to every week.
Software's becoming an absolutely key part
of everything in the world.
So there's almost anything that you could be into
that would probably need your skills.
Do you like music?
Find the best music startups,
making something that's interesting or valuable,
Camping, food, double entry accounting.
There's a startup for every interest,
no matter how obscure or niche.
Go out there, Google,
find some things that are really interesting to you.
And the good thing is, if you're really into it,
you're probably one of the best people
to evaluate whether that startup will work or not.
If you are genuinely interested,
a cold email will work wonders.
(electronic whirring)
Finally, starting a startup.
Now this is the hardest form
of ratcheting up the risk cycle.
And it's not for everyone.
This is like trying to run a marathon on your first try.
Some people are naturals,
but it helps to have been training for a while
before you start your attempt.
And this is the hardest type of risk
that you could possibly take.
You've got to start from scratch.
You're hiring the initial set of people to work on it.
You're raising money, you're building a first version.
None of these things are easy.
When you do it right, you'll find that taking more risk
will result in a lot more reward.
And I guess you could argue that's how it should be.
All right, well, now that you've got choices,
how do you decide?
Well, here's my framework.
Every place you could possibly work
gives you two different axes to think about,
learning and earning.
Learning is very important.
There are a bunch of kinds of things
that are absolutely worth learning
when taking on a position with more risk.
For instance, learning to build something from scratch.
That was my experience working for Palantir.
That was the coolest thing,
to be able to build a view one product from scratch.
Or you might find a place that allows you
to ship software to a lot of people.
There's nothing like seeing that software work
for tens, if not hundreds of millions of people
and that's powerful.
Making hard product decisions,
there are some roles that are for that.
They actually put those decisions in your hand.
That's really priceless.
That's really valuable.
Other places might require you to go out
and get users for them from scratch.
You might have to communicate with the outside world,
press, social media, the users themselves.
You'll learn a ton.
And finally, you might find that there are places out there
that allow you to learn to build and manage a team.
Now sooner or later, that's going to be a valuable thing
because the first part
is always building something other people want.
The second part is actually building the team
that can actually take advantage of it
and bring it to the masses.
Once you catch lightning in a bottle,
it takes a team to hold onto it.
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Next is earning, and this is purely monetary.
I really recommend creating a spreadsheet,
really with two columns.
One is salary.
The other is equity.
Salary is pretty self explanatory.
The more salary, the less risk.
Equity is actually quite a bit more complicated.
But here are the three things
that you need to get from every offer.
And this allows you to compare things, apples to apples.
First, you care about your percentage ownership.
Now that might be the percentage ownership of a company
from an option grant at the company you're at right now,
compared to a stock option grant
that might come from an offer from a startup.
Percentage ownership you can always calculate.
If you have the number of shares
that they're going to give you
and divide it by the number of shares that are outstanding.
Next, you need the valuation of that company at that round.
It's usually whatever the last fundraising round was.
And then finally, what's the vesting schedule on it?
Standard is one-year cliff with a four-year overall vest.
And so if it's four years,
then that gives you really simple math to play with.
Say, you have a 2% offer from a company worth 20 million.
Well, that is $400,000 total.
With a four-year vest,
that's $100,000 a year.
Say you have another offer for 0.2% of the company
from a company that's worth 200 million.
Well, that's also $400,000 total.
And with a four-year vest,
that's also $100,000 a year.
Finally, say you have a third offer for 0.05%
from a company worth 2 billion.
Well, if you do the math,
that's actually $1 million a year total
or $250,000 over a four-year vest.
So you can already see that these offers are not the same.
And here is where risk tolerance really comes into play.
There's no one right answer.
There's just the specifics
and you thinking through what each might mean for you.
The first company might be so early
that it's maybe too likely to fail.
And the second company,
once it reaches Series B may actually have a form
of product-market fit.
Strangely, for some companies,
this is actually the best time to join.
There's still a 10 X or 100 X left in the company.
Some people in the Valley actually make a career
just jumping from fast-growing co at the stage to the next.
Now the third company is kind of interesting
and on its face,
it might actually look like a much bigger offer.
You might also find that that company has raised
more than a billion dollars,
meaning that company actually has a preference stack
of more than a billion.
Unless the company exits for that much or more,
you're getting nothing.
And these are things that you have to think through.
So that's learning and earning.
For me, earlier in my career,
I wish I spent a lot more time learning.
Learning mode gives you the skills and network you need
for that next phase.
Earning mode is about how you get paid.
And there's not really one way to do it either.
The best opportunities broadly let you do both.
They let you learn and they let you earn.
(dice clattering)
How do you actually make the choice?
This is where I like Bezos' regret minimization framework.
And this is what he used actually decide
whether or not to leave his very cushy, perfect job
at D.E. Shaw to start Amazon.
This is what he says.
- I went to my boss
and said to him,
you know, I'm going to go do this crazy thing.
And I'm going to start this company
selling books online.
So it really was a decision that I had to make for myself
and the framework I found,
which made the decision incredibly easy
was what I called, which only a nerd would call,
a regret minimization framework.
So I wanted to project myself forward to age 80.
And so, okay, now I'm looking back on my life.
I want to have minimized the number of regrets I have.
And, you know, I knew that when I was 80,
I was not going to regret having tried this.
I was not going to regret having wanted,
trying to participate in this thing called the internet
that I thought was going to be a really big deal.
I knew that if I failed, I wouldn't regret that,
but I knew the one thing I might regret
is not ever having tried.
And I knew that that would haunt me every day.
So when I thought about it that way,
it was an incredibly easy decision.
And I think that's a very good,
if you can project yourself out to age 80
and sort of think, what will I think at that time?
It gets you away from some of the daily pieces of confusion.
I left this Wall Street firm in the middle of the year.
When you do that, you walk away from your annual bonus
and that's the kind of thing,
then the short term can confuse you.
But if you think about the long term,
then you can really make good life decisions
that you won't regret later.
- Regret minimization, I use all the time.
How am I going to feel when I'm 80?
Will I regret not taking the chance?
Or will I regret more my opportunity costs?
This is a very personal decision
and I can't make that choice for you.
You've got to make it for yourself.
If you can make any kind of software,
if you're a builder,
if you're a designer,
if you're an engineer,
if you're product manager,
who can make anything,
the world is still your oyster.
So again, as far as I'm concerned,
I've learned over and over
that the only true risk that you can take,
if you're in that position,
is not taking any risk at all.
As always, if you like this video,
if you got something out of it,
please click Like and Subscribe.
It helps me a ton.
Please share this video with people
who are trying to think through that very risky decision
in their life, in their career right now.
And as always,
I'll see you next week.
Take care.
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