more risk

March 2022

I’m no career guru, but I think a lot of people are off the mark in how they think about career risk. 

Over the last couple of years, I’ve ditched a tracked path to the law for tech. This was my first “risky” career move. I plan on taking many more.

Bear with me, and let me explain why I have opinions (and, maybe, some credentials :)) on this.

So, my story: I grew up as a working-class kid in the London suburbs. Money was tight and coloured every conversation at home. Growing up like that conditions how you think. My priority was locking in a big, stable salary so that I could live without the same looming worries about paying bills and putting food on the table.

Aged 10, I got into karate. Over the next few years, I started teaching other kids at my club. I saw my instructor make a pretty handsome six-figure living from teaching martial arts full time. A good life too. Gym and chill during the day, teach from 4pm-9pm weekday evenings four nights a week, and a few hours on Saturday morning. It seemed like a sweet deal, so I set my sights on becoming an instructor.

Somewhere along the way, one of my mum’s friends (a dentist) staged an intervention and re-oriented me towards pursuing something with more traditional prestige. My cousin was studying to become a lawyer. I liked writing and was pretty argumentative. Seemed like a good fit. I switched goals.

From there, I went to university at LSE. Like any good aspiring lawyer who wasn’t actually interested in law, I studied history. In those three years, I hustled for the hallowed internships at prestigious city law firms. I played all the stupid games accumulating nonsense CV embellishments (like token society roles) to curry the favour of recruitment staff.

By the time graduation rolled around, I’d accepted a training contract at one of the magic circle law firms in London and was en route to an internship at one of the big investment banks.

At the end of the internship, I was invited back to do their two-year analyst programme after a year at law school (the Graduate Diploma in Law).

The plan was to postpone my training contract and crank out two years in banking, and use it as a fast-track to rise up the ranks in law.

Fortunately, though, I got some wisdom. I saw where my current path would lead me and realised it’s not what I wanted. Taylor Person has this great idea that the riskiest things often look the safest from the outside - silent risk. At some level, I intuited this with law. As Morgan Housel says: “risk is what you don’t see.”

I decided to find an escape hatch, but I wasn’t ready to completely cut the cord just yet. I negotiated with my soon-to-be law firm employer to postpone my training contract for twelve more months.

I’d been thinking about trying startups, so I searched for opportunities there. Getting the first role was a grind, but eventually I found myself at a pre-seed fintech fresh from Y Combinator. It was early days and I loved it.

Eight months later, and with my training contract start date around the corner, I decided to pull the plug on law. I’m making this sound much more straightforward than it was. Reneging on my training contract meant repaying the law school fees my firm had paid as a condition of me accepting the initial offer. After much thinking (and a couple of google docs), I committed to jumping off the legal path and doing what I really wanted to do. I de-risked the transition by lining up a new role at an up-and-coming healthtech before formally throwing in the towel.

That was May 2021. Since then, I’ve spent a lot of time reflecting on that decision and what career risk means to me. With that life story done, I want to spend the rest of this piece articulating some of this thinking.

Most people have a warped perception of career risk. They define it completely the wrong way. I like how value investing legends, like Howard Marks, think about risk. Academic finance theory teaches that risk is volatility. This is hogwash. Volatility is temporary and if you don’t sell, then you only take a hit on paper. Nothing realised. Real risk is the possibility of permanent loss. Like Marks says, “we can ride out volatility, but we never get a chance to undo a permanent loss.” Career risk is the same. Volatility is short term pain for long term gain. That could be taking a lower salary, or a more junior title, or leaving the safety net of employment in return for doing (or getting closer to) what you really want to do. This isn’t a permanent state. It’s just a stepping stone to bigger and better things. You can ride out this short term discomfort, potential embarrassment, and penny-pinching if you have conviction that you’re on the right path.

Permanent loss is settling. When you settle for a career you don’t love - because of money, perceived clout, or certainty (whatever that means) - you lock it in. You take the loss psychologically on day one and then you pay the price in missed happiness, fulfilment (and likely more wealth) every day after that. One of my favourite quotes from JFK goes “once you say you’re going to settle for second, that’s what happens to you in life.” The real career risk is selling yourself short - not figuring out what you truly want to do, what can light you up, and help you actualise. Compromises on salary or prestigious titles are sometimes necessary investments to getting there.

Play the long game. Money is important, but it ultimately has diminishing returns. Self-manifesting, honing skills and doing something you love compound for bigger and bigger gains.

Something that helps with this is keeping your identity small. I got this from Paul Graham. Don’t overthink who you are and what you do. You can be anything you want. Having a small sense of self allows you to be flexible and make more rational decisions without being skewed by a distorted sense of who you are right now and the sunk costs you’ve already incurred. When your identity is small, you have nothing to lose. You can reinvent yourself anytime you want. Being successful requires lots of experimentation and failure to get there. When you have a small identity, you can make tons of bets and keep pivoting each time one fails, until you finally make it. Many people create a big identity for themselves around a job they hate and the obligations they have. Tearing this down and starting over seems too scary. These identities are usually based on projecting some idea to other people. For a lot of lawyers: “I’m well off”, “I’m smart”, “I’m important.” Social signalling is a horrible reason for doing anything. Keep your identity small and don’t build it around what other people think of you.

Next, avoid trading time for money whenever possible. This is probably the worst trade in life. And we all know it deep down. Nothing is more important than time. It’s the ultimate finite resource. There are a billion ways to make money, but no ways to create more time. Money is what keeps many people in miserable jobs. They’ll “just do it for a few more years, then get out and do what they really want.” How often does this actually happen? For me, having time on evenings and weekends to focus on self-development, side projects, and go to the gym is priceless. The beautiful irony is that doing what you genuinely want to do (which can mean sacrificing money in the short term) will lead to more wealth long term. This isn’t revolutionary. When you do something you love, that’s authentic to who you are, you’ll be better at it, and society will inevitably pay you more for it. I always come back to an exquisite bit of wisdom from Jerzy Gregorek (Naval’s trainer): “Hard choices, easy life. Easy choices, hard life.” Making the “hard” choice of giving up bread short term will lead to more wealth and fewer regrets.

One thought on regrets. The biggest risk in life is looking back years later and knowing you wasted time on something you didn’t want. The old (now cliche) Jeff Bezos regret minimisation framework is a good heuristic. I try to focus on what my future self wants from life and where he wants to be. Making decisions to minimise future regrets helps you to focus on what really matters. Most things in the present are frivolous, so there’s no point basing decisions on them. All roads lead back to long term thinking and delayed gratification.

The power of career exploration is hugely undervalued. The explore vs. exploit mental model has been popularised in the last few years. Rightly so. It’s a good one. When applied to careers, the logic goes you should spend a decent chunk of time exploring different avenues, deciding what you want to do with your life, and only hunker down in exploit mode once you’ve committed to “the one.” Doing otherwise leads to premature optimisation (in computer science speak). That’s why you see middle-aged men and women having life crises when they realise they’ve spent twenty years pursuing the wrong career because they never took the time to explore other options. There’s strength in meandering, especially early in your career. You’re more likely to find the right place for you if you try lots of different things. Otherwise, you’re just relying on luck.

Exploiting the wrong thing is mostly wasted energy. Another one of my favourite quotes comes to mind. I had no idea who Kwame Appiah was before hearing this second-hand on a podcast, but it’s a gem: “It’s not how well you play the game, it’s deciding what game you want to play.”

Exploring can look risky in the short term. While peers are moving up career ladders, you might be floating around, dabbling in lots of different things. You may look (and feel) behind. But, like in investing, time horizon is everything. It just needs to play out. By taking the short term “risk” of not doubling down on the first thing and rushing to move up the greasy pole, you position yourself for greater long term wealth and happiness by finding what you genuinely want to do. I’ve had this with jumping to startups. To many people, I’ve left money on the table. But, long term, I know it’s a positive ROI. When you take the time to make sure you’re climbing the right hill, you optimise for reaching a global, not arbitrary local, maximum. Hard choices, easy life.

Broad exploration has other payoffs. As Naval says: specialisation is for insects. Being a generalist carries power. Shout out to David Epstein for illustrating this in his fabulous book Range. Reading this confirmed a lot of my instincts. Deliberate exploration provides a sampling period where you can try many different things and find match quality. Wide-ranging skills and experiences give you versatility. It’s the intersection of skills that matters. So, the upshot is: taking time to explore helps you get to the right place and then makes you better when you get there as you’ll be leveraging a much broader skill base. I always try to remember that life is plenty long enough if you play it right. It’s very possible to have several different careers if you stay flexible and open-minded.

There we go. My experience over the last couple of years has given me a new lens for seeing career risk that runs counter to a lot of mainstream thinking. To sum it up: people tend to over-index on the short term at the expense of the long term. To preempt the critics: I know I’m young, with minimal obligations. That makes risk taking easier, for sure. But ultimately, this is a mindset. And one that I intend to keep for life.