(Photo by graziedavvero)
The following post is co-authored by Ben Casnocha and Reid Hoffman. In the conclusion, there is a once-in-a-lifetime opportunity to be mentored by both of them.
Ben Casnocha is an award-winning author and serial company-builder, whom BusinessWeek has labeled “one of America’s best young entrepreneurs.” Reid Hoffman is Co-founder and Executive Chairman of LinkedIn, a Partner at iconic venture capital firm Greylock Partners, and #3 on Forbes’ 2012 Midas List. Last but not least, he’s often referred to in Silicon Valley as “The Oracle” for his seemingly prescient start-up-picking abilities…
Ben and Reid are the authors of the #1 New York Times bestseller, The Start-Up of You: Adapt to the Future, Invest in Yourself, and Transform your Career, which argues that everyone should apply the principles of entrepreneurship to their lives, even if they never plan on starting or running a company.
Enter Ben and Reid
Roll the clock back 15,000 years and play through two scenarios in your mind.
Scenario 1: It’s nearly dusk and you’re sitting on a fallen tree to rest. Suddenly you hear some rustling in the brush behind you. Instinctively, you shoot your head around. Your eyes dart back and forth searching for the source of the noise. It’s quiet for a few moments and you hear your heart pounding in your chest. Unsure what caused the noise, you spring to your feet and decide to run back to safety with the rest of your tribe.
Scenario 2: You’re walking along a dirt trail near the river. Far across the water you see the carcass of a recently killed deer. It could provide several days worth of meals but traversing the river would be arduous and time-consuming. The sun has set and if you misjudge the water depth, you might be swept away and unable to find your way back in the dark. You decide it’s not worth the trek.
Both of these decisions make sense in their own way: If you choose to stay in the woods and the rustling noise is a hungry wolf, you’re dead. If you skip going after the deer carcass, you’re not going to starve. You’ll find other food or another tribe member will. This logic is ingrained in our brain: It’s more costly to miss the sign of a threat than to miss the sign of opportunity.
The world has changed, but our brains have not
We live in a different world than that of our ancestors. We do not sit around fires and wander forests in search of food. Civilization has changed greatly, but our brains have not.
Evolution via natural selection shaped the human brain over millions of years to achieve a simple goal: stay alive long enough to reproduce and raise offspring. As a result, we react faster, stronger, and harder to threats and unpleasantness than to opportunities and pleasures. There’s a red alert in our brain for bad things, but no green alert for equivalently good things. Sticks get our attention and carrots do not, because avoiding sticks is what mattered to staying alive.
Neuropsychologist Rick Hanson sums up this “negativity bias” nicely:
“To keep our ancestors alive, Mother Nature evolved a brain that routinely tricked them into making three mistakes: overestimating threats, underestimating opportunities, and underestimating resources (for dealing with threats and fulfilling opportunities).”
Overestimating risks and avoiding losses is a fine strategy for surviving dangerous environments, but not for thriving in a modern career. When risks aren’t life-threatening, you have to overcome your brain’s disposition to avoid survivable risks. In fact, if you are not actively seeking and creating opportunities—which always contain an element of risk—you are actually exposing yourself to more serious risks in the long term.
What kinds of career risks should you take?
Risk is personal—what might be risky to a friend may not be risky to you. It’s also situational—what may be risky in one situation may not be risky if the circumstances are slightly different. But for anyone and everyone, a risk is good when the possible upside outweighs the possible downside, when the reward justifies the risk.
“All courses of action are risky, so prudence is not in avoiding danger (it’s impossible), but calculating risk and acting decisively.” – Machiavelli
Indeed, risk is an unavoidable constant of life, so your focus should be on taking the right kinds of risks that offer the right kind of opportunity.
The problem is the negativity bias — we tend to exaggerate the riskiness of certain moves and underestimate the opportunities of others. Here are some examples of frequently overstated risks, along with their associated opportunities:
Jobs that pay less in cash but offer tremendous learning.
People focus on easily quantifiable hard assets—like how much they’re getting paid in cash. But soft assets—knowledge, connections, and experiences—matter more when you’re younger. Jobs that offer less cash but more learning are too quickly dismissed as risky.
– High-level assistantships
Part-time gigs that are less “stable” than full-time jobs.
Many dismiss part-time gigs and contract work as being inferior to full-time jobs. But in reality, doing contract work is a terrific way to build the skills and relationships that help you pivot into the next opportunity.
– Freelance writing
Working with someone with little relevant experience but high learning clock speed.
Fast learners make up for their inexperience in spades. The flip side of inexperience often is hustle, energy, and a willingness to learn.
– Taking a chance on a smart, scrappy person just out of college
– Partnering with someone mid-flight in a career who’s pivoting into a new industry and feeling re-energized by the challenges
An opportunity where the risks are highly publicized.
The more we hear about the downside to something, the more likely we are to overestimate the probability that it will occur (this is why people tend to become more afraid of flying after news of a plane crash is splashed across the headlines). If the media, or people in your industry, talk a lot about the riskiness of a certain job or career path, it probably isn’t as risky as most believe, and that means there’s less competition for landing the opportunity.
– Starting a company
– Working in a high tech industry
International career opportunities involve uncertainty. There may be confusing cultural nuances or low transparency in the government. Spending time in other countries “feels” risky in part because when you’re not from a place, you initially do not understand much of the day-to-day life around you. But the best opportunities are frequently the ones with the most question marks. Don’t let uncertainty lull you into overestimating the risk. As Tim says, “Uncertainty and the prospect of failure can be very scary noises in the shadows. Most people will choose unhappiness over uncertainty.” This is true, and especially worth remembering when contemplating an international adventure.
– Foreign assignment within your company
– Attending a conference or seminar in another country
– Volunteering overseas
In all these opportunities, the worst case scenario tends to be survivable. When the worst case of a given risk means getting fired, losing a little bit of time or money, experiencing some discomfort, etc., it is a risk you should be willing to take. By contrast, if the worst-case scenario is the serious tarnishing of your reputation, or loss of all your economic assets, or something otherwise career-ending, don’t accept that risk. Asking yourself whether you can tolerate the worst case scenario is a quick and dirty way to size up risk in situations where you don’t have much information or time.
How often should you be taking risks?
If you’re reading this blog, chances are you encounter situations of risk often.
Working remotely, say, or self-experimenting with unconventional diets and blood tests. These sort of exploits introduce risk into your life in the way of volatility and uncertainty, but they are not necessarily risky things to do. The risk level doesn’t cross a threshold so as to become irrational. In fact, by pursuing new opportunities like these all the time (and accepting their associated risks), you are actually creating career stability for yourself.
Traditionally, people hold the opposite view. In 2004, two economists estimated the riskiness of working in different industries, according to the consistency of income streams and average unemployment levels of people in those careers. They referred to income fluctuations, including bouts of unemployment, as “shocks.”
By their account, risky careers (more severe shocks) included:
Non-risky careers (less severe shocks) included:
– Health care
The risky careers were thought to be more volatile, full of regular risks and issues, and non-risky careers were thought to be more stable. Risk-averse people are teachers, doctors, and lawyers. Risk-takers may be starting companies or trying out on Broadway.
But it’s exactly the opposite.
A low risk career is “stable” in the way a country like Syria or Saudi Arabia is stable. Dictatorships do not allow much day-to-day volatility, but when there is a fire, it can quickly turn into major chaos or even revolution. By contrast, Italy has been dealing with constant political turmoil for centuries, and has experience in responding to unexpected crises. As Joshua Ramo explains, Italy is resilient to dangerous chaos because it has absorbed frequent attacks, like “small, controlled burns in a forest, clearing away just enough underbrush to make [them] invulnerable to a larger fire.”
In the short term, low volatility means stability. Over the long run, however, low volatility leads to increased vulnerability, because it renders the system less resilient to unthinkable external shocks.
This paradox—high short-term risk leads to low long-term risk—holds true for your career.
Fragile careers vs. Resilient careers
IBM, HP, General Motors— stalwart companies that have been around a long time and employ hundreds of thousands of people. At one point in their history, each of these companies had de facto (or even explicit) policies of lifetime employment. They were the stable employers of yesterday.
While today’s employers don’t offer lifetime employment, a handful of industries still offer some semblance of stability: it’s relatively hard to be fired, your salary won’t fluctuate much, and your job responsibilities stay steady. These are the careers generally deemed less risky: government, education, engineering, health care.
But compare someone working full-time in state government to an independent real estate agent. The real estate agent doesn’t know when his next paycheck is coming. He has ups and downs. He has to hustle to build a network of clients and keep up with changes in the market. His income is lumpy, and sporadic big wins (selling a multimillion-dollar home) keep him alive. The government worker, by contrast, gets a steady paycheck and an automatic promotion every couple years. He always eats well . . . until the day comes that government pensions explode or austerity measures wipe out his department. Now he’s screwed. He will starve because, unlike the real estate agent, he has no idea how to deal with the downs.
Or compare a staff editor at a prestigious magazine to a freelance writer. The staff editor enjoys a dependable income stream, regular work, and a built-in network. The freelance writer has to hustle every day for gigs, and some months are better than others. The staff editor is always well fed; the freelance writer goes hungry some days. Then the day comes when print finally dies. The industry crumbles, the magazine folds, and the staff editor gets laid off. Having built up no resilience, he will starve. He’s less equipped to bounce to the next opportunity, whereas the freelance writer has been bouncing around her whole life—she’ll be fine.
So which type of career is riskier over the long run?
Today’s world is full of change and unpredictable disruption. Unless you take frequent, contained risks, you are setting yourself up for a major dislocation at some point in the future. Inoculating yourself to big risks requires taking small, regular risks—it’s like doing controlled burns in a forest. By introducing regular volatility into your career, you make surprise survivable. You gain “the ability to absorb shocks gracefully.” You become resilient as you take risks and pursue opportunities.
Take, for instance, moving to Santiago, Chile for nine months.
I hoped an international living experience (distinct from a travel experience) would jog new sorts of learning and opportunity. I went to Chile with no set plan, no fluency in the language, and never having lived in another country outside of the US. I had butterflies in my stomach when I was packed my bags. There was immense uncertainty. I swallowed through that uncertainty on the faith that the cultural stimulation alone would be worth it, even if my social/professional/linguistic goals weren’t realized.
Looking back now on those nine months, it was an unmatched growth experience for me.
What will be your unmatched growth experience?
Final thoughts from Reid
For my first job after grad school, Apple hired me into their user experience group. Shortly after starting on the job, I learned that product/market fit—the focus of product management—actually mattered more than user experience or design. You can develop great and important user interfaces, and Apple certainly did, but if customers don’t need or want the product, they won’t buy. At Apple, and in most companies, the product/market fit questions fall under the purview of the product management group, not user experience. And because product management is vital in any product organization, work experience in the area tends to lead to more diverse career opportunities.
I attempted to iterate into a product management role within Apple. But the product management jobs required product management experience. It’s a common catch-22: for jobs that require prior experience, how do you get the experience the first time?
My solution: do the job for free on the side. I sought out the head of product management within the eWorld group at Apple and told him I had a few product ideas. I offered to write them up in addition to everything else I was doing, and I did. It was a risk: my boss could have been annoyed I wasn’t focused on my existing responsibilities; given my lack of experience, there was a decent chance the product ideas I wrote up were going to be bad, thus making a bad first impression to product folks within Apple; my youthful proactiveness could have been seen as naïve brashness.
But the risk worked out in the end–I got good feedback on my moonlit product plans, and I ultimately acquired enough experience to land a full-time product management job at Fujitsu after Apple. Of course, not all risks work out—but this story of volunteering-to-do-extra-work sticks with me as a career risk I am very happy I sought out, as it set in motion a series of other key opportunities.
[On one other risk that paid off]
I joined the board of PayPal while I was working at Socialnet, my first company. Normally entrepreneurs are told to maintain extreme focus on their company and day job, so joining a board of another company at the time was a risk. I establishedprotocols with Peter and Max to make sure the PayPal commitment wouldn’t interfere too much with Socialnet – e.g. I promised to them back by midnight if they had questions, which meant discussion in the evening hours, not 9-5 normal workday hours. As it turned out, Socialnet was soon to be winding down operations so I pivoted to work at PayPal full-time in January, 2000. The board position risk proved wise in hindsight because, in addition to being a learning opportunity in its own right, it set me up for a full pivot to Plan B. In other words, the PayPal side-project risk meant I traded down on focus in exchange for a broader set of learnings and increased mobility for my next career move.
4 keys to becoming a more resilient, intelligent risk taker
1. Remember your negativity bias will cause you to exaggerate your evaluation of certain risks. Whatever it is you’re thinking about doing, there’s probably not as much risk involved as you think.
2. Identify—and take on—risks that are acceptable to you, but that other people tend to avoid. Are you okay having less money in savings and taking a low-paying but high-learning job? Or maybe a month-to-month employment contract as opposed to something longer term? Go find a project with these sorts of risks. It will differentiate you from others.
3. Say “yes” more. What would happen if you defaulted to “yes” for a full day? A full week? If you say yes to the conference invite you were tempted to skip, might you overhear a comment that ignites your imagination for a new business or new research or a new relationship? Perhaps. Might it also lead to some dead ends, mishaps, and wasted time? Sure. But trying new, small things every day introduces regular risks that, over time, build up your resilience to big disruptions.
4. Now it’s your turn. Leave a comment on this post, introduce yourself, and tell us:
– What change do you want to make in your career in the next 30-60 days? (e.g. Change jobs, ask for a raise, find a new opportunity within your company)
– How are you thinking about the risk involved in this move?
We’ll select the person who leaves the most thoughtful comment no later than 5pm PST, June 21 (Thursday), and personally invest in making that person’s next career move successful.
Here’s what we can offer:
– Over email and in a 30-minute phone call, we’ll suggest relevant opportunities, key people to meet, and provide motivational support. The initial 30-minute call will be with me (Ben), and the follow-up emails will include Reid.
– Two signed copies of The Start-Up of You.
– Your story will be highlighted in our LinkedIn Group.
– Free Linkedin Premium subscription
Think of this as a personalized high-impact session on how to take your next best step by embracing (or creating) the right types of risk.
Odds and Ends: App Contest Winner
Chad Mureta has chosen the winner of the app contest in his previous how-to post on building an app empire. Thanks to all for your submissions! Here’s his announcement:
The winner of the contest is Alex Kourkoulas. His app idea: “Legend: Put meme-like captions on your photos and share them with friends.”
Our top two favorite runner-ups:
Dina S. Her app: “Teacher Text: Quick, easy SMS communication with teachers. Students can text questions about homework, quizzes, tests, or class projects. Students can also register to receive texts containing project or assignment details, due dates, quiz & text reminders, resources, class announcements, etc. No personal phone numbers would be displayed within the app, just usernames. Teachers can add and group students based on their class period, allowing for easy group texts of vital class-related information. Parents can register to receive a copy of all texts sent and received, allowing them to stay in the loop.”
Bill Rosado. His app: “Phone Home: Automatic calling/texting a designated number when the phone arrives at a predetermined destination. Great for teenagers or elderly parents!:”
Posted on: June 14, 2012.
The Tim Ferriss Show is generally the #1 business podcast on iTunes, and it was selected for iTunes' "Best of 2015." Each episode deconstructs world-class performers from eclectic areas (investing, sports, business, art, etc.) to extract the tactics, tools, and routines you can use. If you want to 10x your productivity, click here.