Dan Vassallo walked away from a $500k a year salary at Amazon to become self-employed. He didn’t do this to make more money and he didn’t do this to trade the identity of a successful worker for the identity of a successful founder.
He did it because he couldn’t quiet the feeling that there was a bit more than this path was offering him. Increasingly people like Dan, people on paths that “make sense” are walking away earlier in their careers. In the past someone Dan might have stuck it out and tried to become a Senior Vice President.
Yet he wanted out.
Dan found that early in his career his “motivation was off the charts.” He gained increasing responsibility and with that, promotions, money, and status. He also had a pretty good life. As he says:
My work–life balance was good too, despite Amazon’s reputation. I didn’t need to prove myself anymore, and I could get everything done in 40 hours a week. My team worked from home one day a week, and I rarely opened my laptop at night or weekends.
So why would he leave?
…despite all this, my motivation to go to work each morning was decreasing — almost in an inverse trend to my career and income growth
He was scared that if he kept going he would lose a part of himself that was important. So he set himself a goal,
My target is to cover my family’s expenses before I run out of savings while doing something that intrinsically motivates me.
Too Much Runway
It turns out that running out of savings was not a real risk. He underestimated how motivated he would be once he left self-employment and the number of different ways he could make money.
Dan was ready to leave two years before he did but he delayed it because he wanted to build more savings. He wishes he had left earlier and thinks that “too much runway” can even be counter-productive.
Dan’s initial plan when he became self-employed was to build a startup. He focused on building a software-based business but quickly realized that this was a lot of time to focus on one thing with very low odds of success.
Instead, he could raise his odds of success by pursuing a series of “small bets” and instead of trying to optimize and maximize, he found that he could attribute all his success “to quitting the wrong things.”
One example was a tweet thread on how to use AWS that he turned into a 173-page e-book that helped him make more than $100,000 selling knowledge products online.
Keeping The Game Going
Many people who think about taking a leap to self-employment imagine that its about trying to replace your current income or make money. Yet for many people that take the leap, they realize that this new way of living is something that they really enjoy and that their willingness to compromise to keep it that way increases.
This shifts the perspective from making money to lowering your chance of ruin. Spending on things you might not even question with a steady salary suddenly becomes frivolous expenses and in many cases, not missed.
As Dan says, “If you like the self-employed lifestyle, you need extreme risk aversion, not extreme risk taking. You’re not trying to maximize profits. You want to avoid having this lifestyle taken away from you.”