Ship It! – Episode #88

Treat ideas like cattle, not pets

with Daniel Vassallo, creator of smallbets.co

All Episodes

In our ops & infra world, we learn to optimise for redundancy, for mean time to recovery and for graceful degradation. We instinctively recognise single points of failure, and try to mitigate the risks associated with them.

For some years now, Daniel Vassallo has been doing the same, but in the context of life & work. Daniel talks about the role of randomness, about learning from small wins & about optimising for a lifestyle that matches your true preferences,. Apparently, ideas too should be treated like cattle, not pets.

Featuring

Sponsors

Fastly – Our bandwidth partner. Fastly powers fast, secure, and scalable digital experiences. Move beyond your content delivery network to their powerful edge cloud platform. Learn more at fastly.com

Fly.io – The home of Changelog.com — Deploy your apps and databases close to your users. In minutes you can run your Ruby, Go, Node, Deno, Python, or Elixir app (and databases!) all over the world. No ops required. Learn more at fly.io/changelog and check out the speedrun in their docs.

Changelog++ – You love our content and you want to take it to the next level by showing your support. We’ll take you closer to the metal with extended episodes, make the ads disappear, and increment your audio quality with higher bitrate mp3s. Let’s do this!

Notes & Links

đź“ť Edit Notes

Chapters

1 00:00 Welcome
2 01:20 Daniel Vassallo
3 04:19 Slack in the system
4 12:04 Daniel's existential crisis
5 19:41 Sponsor: Changelog++
6 20:38 When to start a project
7 25:07 AWS books to chopping boards
8 33:55 Working for AWS
9 38:41 Being honest with yourself
10 48:11 What you do is not who you are
11 53:13 How does Daniel Ship It
12 57:23 Can goals be harmful?
13 1:03:06 How to make 100k in a year
14 1:03:55 Wrap up
15 1:08:26 Outro

Transcript

đź“ť Edit Transcript

Changelog

Click here to listen along while you enjoy the transcript. 🎧

Today you shared something on the Small Bets Discord general channel that caught my attention. “The only small better who shared the podium with Fernando Alonso.” So first of all, what is a small better?

Well, I think it’s somebody who sees work as a series of small bets, I like to call them, which is basically just a very time-boxed effort towards something rather than an indefinite project. So I think it’s one way to tame the uncertainty of doing something speculative, to some degree, and I think a mistake many people do, which I’ve done myself many times as well, and I think I’ve learned from it, is starting a project without a fixed date of when this project will end, and without well-defined expectations… So what this leads us to do many times is to keep working on it, keep believing that eventually destiny will reward us for all the hard work we’ve put into it… And unfortunately, I think it turns out to be an almost delusional way of operating and treating the uncertainty of these types of projects.

I think there are some people who figured out a better way of doing it. I mentioned in that Discord channel the people behind Basecamp, the company, have been advocating this type of work for probably 20 years or more. Timeboxed budgets [unintelligible 00:02:45.02] is small for you or for your company, depending on circumstances. If you’re young, 20-year-old, with no dependents, it might be a bit bigger; if you’re a company of 50 people, it might be some other time. If you’re a person like me, with two young kids, quite busy, it might be a slightly shorter time… So on and so forth. But that’s the key thing - there’s some fixed time, and you build something within that budget, right?

And then, once you put it on the market, you have no obligation, but you have the option to make another small bet on the same project. People behind Basecamp have been building their flagship product this way, again, for 20 years or more. But they’ve abandoned many things along the way. In fact, at one point five or six years ago they’ve pretty much shut down all the other projects and focused on one. Recently, they started adding again, Hey, and I think they have some other things in the works as well right now.

So I’ve been very much inspired by people like them, and as many others, even outside of software and tech, and my industry, and I think there’s lots to learn from it, again. And I think it’s a learning of – there’s no recipe for success in business, but I think it’s a recipe for taming the uncertainty, making things less daunting, to stay motivated, to not get fooled by the randomness of all of this, and diverse.

Wow, you mentioned a lot of great things. I promised our listeners that we will unpack them soon. Back to the post that you shared. That was David’s “Glorious days like these.” We will put the link in the show notes. When you go to the post, and even if you don’t, the one thing which will strike you is the calendar screenshot, which is completely empty. That’s the takeaway. If you’re trying to cram things, if you’re trying to do too much, maybe it’s not the best approach. Slack in the system… What do you understand by “Slack in the system”, Daniel?

Yeah, it’s something that is very highly underrated in productivity advice nowadays in the modern world. It’s mostly focused on trying to squeeze every second out of the day, and pack as much as possible, creating habits and systems and techniques, calendars, tools to try to be even more optimized. Optimization however, comes at a cost. Like a Formula 1 car. A Formula 1 car is very optimized to go as quick as possible on the circuit, but it’s very fragile. As we all know, they break apart easily, and highly unreliable as compared to regular cars. That’s the cost of optimization, and I think it’s a very similar analogy to us. If we want to be agile, and we want to have the capacity to pounce on opportunities as we bump into them, we need to have some intention and slack in the system, right? Some safety margin, which could be three days in the calendar, or a mental sort of capacity, or a combination of those things… So that’s when we bump into a good opportunity, when inspiration strikes, when we’re lucky - we don’t just put it on the shelf, because opportunities and inspiration is perishable, as is commonly said. But we’ll have the opportunity to pounce, work on them, and take action.

[06:11] I think sometimes we’re lucky, we get into these serendipitous situations, we bump into great opportunities, but we’re not able to benefit from them, because we don’t recognize them, or we don’t have the capacity to recognize them. I think when we have a very busy calendar, I think subconsciously, we’ll put the blinders on, so that we don’t get distracted, because our focus is on getting to do the planned things. So we become blind, essentially, to opportunities that might fall right in front of our eyes, and we literally just don’t see them.

So I’m a big believer in trying to arrange our life/work arrangements as much as possible to intentionally create slack in the system, which will look like wasted time when you look at them individually. You might look like “I didn’t do anything meaningful, day after day after day”, but then sort of the big things tend to happen, and eventually it might be five days out of 365. we might look at data, the 60 days of the year, and say, “Nothing came out of this slack”, but then there’s those five days when the important things tend to happen.

This resonates with me deeply, because I realized, having been part of your course, and having had that time to reevaluate a few things, I realized that I have no slack in the system. My system was 110%, 120%. I was trying to cram more things than work hours. And that usually takes from family time, it usually takes from personal time, and it’s not great. So I remember what we talked before we started recording - that is a consequence of this, of the importance of slack. For our listeners, everything will make sense in a few episodes, so let’s not spoil the surprise just yet.

So when I reached out to you about recording this episode, I mentioned that our conversation will be a good follow-up to episode 77. And I’m really enjoying this coincidence, because the last episode, 77, was with DHH.

Oh, interesting. Fascinating.

Exactly. So you are the follow-up right to that conversation. It just so happened. So I’m really enjoying this coincidence; serendipity, as you mentioned it. That’s the one word which comes to my mind.

Okay. I really enjoyed being part of the course, of the Small Bets course, and there are a few ideas that resonated with me deeply. First of all, slack in the system, but also the role of randomness, bias of survival, and lifestyle design. And these happen to be the titles, with the various sessions that you hold. And you already mentioned a few of these at the very beginning. And it seems to me that these ideas resonated with thousands and thousands of people. How many cohorts have you had so far?

21 cohorts of far. Yeah, starting the 22nd in February. Yeah, so we have 2,000 members in our community, so it’s been quite successful.

Why do you think these ideas resonated with people? Do you have a theory as to that?

I believe that subconsciously – I think there’s something in our DNA. This is my speculation, that this is a more prudent way of dealing with the uncertainty of life and business in general. I think we’ve been, again, in the modern world we’ve been almost brainwashed by venture capitalists and the media in general and other things - maybe not intentionally, but it’s the consequence of believing that we have some potential to fulfill, and we should go all-in, and we should try to maximize everything, and sacrifice all our lives, and so on and so forth… Which seems glorious, and glamorous, and so on and so forth, but the reality is that I think subconsciously, we realize that the odds of those things happening are very, very low; one in a thousand, one in a million. And we know that we only have one lifetime. Those payoffs might materialize if we had the option to live a thousand lifetimes, or a million lifetimes, but we know that that’s not the case.

[10:14] So I think, again, it’s just our subconscious - it’s there to try to protect us, and when we see a different way of operating, I think we realize it’s a better bargain to almost shoot for the middle, where things are much more attainable, much more sustainable, there’s less risk of hidden downsides than with going with the extremes… And they click. And again, people like DHH and Jason Fried have been talking about these things for decades; many others as well. None of these are probably my own original ideas; it’s things that I stumbled on as I was living the enterpreneur journey myself. I did lots of mistakes, and I’m sharing them with people, with examples of my own and from others that I’ve encountered… And they’re resonating with people. And I think they’re resonating with people as well because people are trying them and finding some small wins, and then they’re realizing that this is a much more motivating way of finding success, that is more prudent, a lot more attainable, and so on and so forth.

This is basically like if you want to make money from writing - you could try to aim to become the next J.K. Rowling and sell a billion dollars in books, which is of course possible, because it was done, and this probably will be done in the future… But we all know, it’s unlikely. But there’s other ways if you want to monetize your writing; there are probably dozens of different ways that are much more modest, which might make you a few hundred dollars a month, maybe a few thousand dollars a month, or something like that, which are much more attainable. And we are focusing on those, and ignoring the more speculative J.K. Rowling type bets.

Yeah. These ideas have been around for a long time, for sure. Do you remember the moment when you realized, “I believe in this so much that I’m going to do something about it”?

I think it was almost an existential crisis. I quit my job; I had a good, a reasonably cushy, well-paying job at Amazon until the beginning of 2019. I quit because I realized a career as a full-time employee was probably not the ideal one for me. We can talk more about that. But I quit thinking that I’m going to do the typical software guy bootstrapping thing, that I’m going to think of some good idea on my own, just by brainstorming and thinking hard, then I’m going to work on it for a while, release it, try to find customers and figure things out along the way. And as I was doing this, and even though I was getting good signals with my project, that is what I started, six months flew quickly… You know, time flies, and I didn’t have infinite – I had quite some savings, I was lucky, but I didn’t have infinite savings. Sooner or later, they were going to run out. And I remember, literally, staying up at night, with almost pretty much high anxiety, thinking what will happen if I release this project and nobody pays? Or what if a few people pay, but it takes a long time for this to grow? When will I know? When should I pivot? What signals should I be watching for? What if I end up spending all my savings, and I’m back to square one with nothing now to show? I have to go back to a full-time job now, with no savings… And I didn’t have an answer to all these questions. So I realized that I was on a journey that was highly uncertain. And again, I feel like I was duped a little bit. I might have duped myself into believing that – I treated this like any project when I had a full-time job.

[14:05] When I was working at Amazon, my boss gave me a project, I worked hard on it, and if I showed that I worked hard for it, I would be okay; I will get promoted maybe, or at the very least keep my job. That’s how I worked before. But in the outside world, that wasn’t enough - putting in hard work, putting in lots of efforts, doing the right things is not enough. There’s lots of uncertainty.

So I think that was an epiphany for me, the realization that this is a highly uncertain part and that I need to do something different. And this something different to me - I didn’t really understand it formally. But I said, you know, “Probably what I need to do right now is try to cover my expenses.” Cover my mortgage, cover my bills, by any means possible. Of course, legally, ethically and whatever…

Of course, of course.

But anyway that I could, without necessarily being very picky, very choosy. I don’t care about how sustainable it

is, or how high the return on investment is; whatever I can, to at least have some baseline income. And literally, the next day, after I went through this week of anxiety, I picked up my phone, I went to my personal contacts, and I found a friend who needed some programming help, and I started doing some freelancing with this friend. But the connections wasn’t a lot; I was doing like 20 hours a month, barely enough to cover my mortgage… But it was a huge, huge improvement in my peace of mind. Now I have some income. And I knew that if I wanted to, I could maybe find another client, or maybe add some more hours… It was incredibly liberating. Now, I wasn’t relying on this project succeeding anymore; it almost became like a bonus. Now, if it succeeded, it’s great. If it doesn’t, I’m not going to be desperate, as there’s already something there.

And immediately, things started to – one thing started to come after another. I was seeing these creators, the creator economy was flourishing, self-publishing, educational products, programming books, and whatever, and some of them making decent payoffs, some of them less so… And I said, “I have some technical content in my head. I worked at AWS for almost 10 years, I know certain products inside out… What if I do a brain dump of some of the things I know, and try to sell it online?” And this became another – now I call them another small bet. I spent like a month on this project, not a long time; brain dump of everything in a Word doc, minor editing, put it out on the internet… And within a few weeks, it made low five figures, and it was, again, eye-opening to me. Like, why am I bothering with this huge, ambitious project, highly speculative, that might never – yes, the upside might be huge. If all the stars align, I might make a big exit, or have a high income from it… But there are these small, much more achievable projects that are much more attainable.

And over time, I kept experimenting with different ideas, some things worked, some things didn’t, and I started to believe that this is a sound philosophy, and then, as I kept searching it more, I realized “This is nothing new.” The operators in this world, like book publishers, venture capitalists in Silicon Valley, movie studios in Hollywood, operate on this strategy, and some of them have been doing it for centuries, like book publishers, even VCs… I mean, not the modern kind, but investors in general, since probably the Middle Ages have had some portfolio of activities; they only invest small amounts of their funds, they never go all-in on one thing… They treat ideas – I like to call it treating ideas like cattle, not like pets, so you don’t fall in love with your projects… Yes, you want them to succeed, you’ll be disappointed if they don’t… But if they don’t, it’s just business; you move your attention to something else.

[17:57] And I started to see these parallels with how these industries operate, and I think many of their principles apply even to us as individuals. Yes, we’re not investing capital, unlike a book publisher, or a venture capitalist who’s investing their capital; we’re investing our time. But it’s equally scarce and precious, probably more so… And I think we can sort of, again, reason the same way as a VC does with their funds, but in our case with how we invest our time.

So what’s our time? We only get a few hours a day, that is disposable to our projects… How should we invest it? Should we go all-in for many years on one project? Is that a wise strategy? That would be like a venture capitalist going all-in with all their funds on one idea. It’s almost never going to happen, right?

Yeah, of course.

Or should we sort of build a portfolio of small, safe to fail ideas, and have a good selection criteria for things that have a decent fighting chance of giving us a small payoff, keep building on those payoffs, keep building reputation, building assets, building sort of knowledge over time, and benefit that way? And again, I think back to sort of the previous question - this is why things are resonating with people, because they see it almost subconsciously, almost instinctively, that this is a much more prudent and realistic way of succeeding in this randomness-laden world of business.

How do you know when it’s time to start a project or wind down a project? And I’m calling it a project, maybe that’s the wrong word…

No, I like project. So I think when to start is – I think you need to have some selection criteria. When I talk about these ideas, some people react to “You know, it’s probably not a good idea to just do random things.” And I agree; you shouldn’t just be trying random things, with no clue how they’re going to succeed, or how you’re going to make them work. I think it’s important to have some selection criteria that allows you to filter ideas and arrive to things that have some fighting chance of working; you have some hypothesis. You could say, “Okay, I could do this, and here’s how I will find N number of customers, and presumably, some of those customers will pay so much, and that would result in this type of payoff. And this payoff would be good for the type of effort I’m putting.”

So for example, when I created my AWS book, I thought “If I make $10,000 out of this, it would be great.” I spent a month on it; if I were to earn $10,000, great. And I thought “Okay, what would it mean –” You know, this is a $30 book. Back then it was like that; how many people do I need to sell to to make $10,000? You know, one divided by the other, and I said, “Okay, maybe if I get 5% conversion rate, or 3%”, I don’t remember what numbers I assumed, “I need so many visitors.” I had some hypothesis, and I said, “Okay, I have a Twitter account”, I had 5,000 followers, “Maybe if I tweet about this 50 times over the next year, I will get those views.”

[22:20] No guarantee that this was going to happen, but I had some idea that there’s a chance, that there’s a reasonable chance. So I think when you bump into an idea, and you see the potential for a small payoff, I think it’s worth giving it a shot. And I think many people exclude ideas, because they’re not sustainable, or they’re not really caring, or they don’t have some potential to be something big, but I think that’s a mistake. People leave a lot of good ideas on the table, and I think these small, one-off payoffs are very much underrated. They don’t just give you the payoff, they also give you lots of lessons, lots of new skills, new information about yourself and what you like to do, or what you’re good at; they build your relationships with customers, more reputation, testimonials… So many accumulative things that you can build on from these small wins.

So when do you choose to start something? I think it’s when sort of something meets your selection criteria. Is it something you can bring to market quickly? Is it something that you think you can bring to market on your own, or by yourself? Is it something that has a fighting chance of working, you can see some line of sight of how that payoff could materialize? If it’s yes, and you have the time, give it a shot.

When do you choose to wind something down? I try to, if possible, avoid even being in that position, right? Why do you need to shut something down? You need to shut something down presumably because it’s costly to keep on the market, right? Either financially, or operationally, mentally, it’s just a headache. If part of the selection criteria is you choose projects that don’t have that property, I think you’re much better off. Then almost nothing fails; things just haven’t succeeded yet… Which I think is a much more liberating way of looking at things. And then - yes, you don’t have the obligation to give more attention to projects. You may realize you’d rather give attention to other things, that have more potential, or you try to give the attention to. But again, you don’t need to necessarily make this hard decision of “I need to shut this down” or “This is a failure.” So that’s something as well that I sort of over time realized is important for me, that in my selection criteria I ask myself, “Would this be costly to keep on the market? Would I need to make the payoff before some time?” And as much as I can, I try to avoid those projects.

Interesting. That’s a very interesting perspective, because you’re right, when you put a book out there, a course, something that’s finished, in a sense, then you see what happens with it. And there’s no need to do a version two, and there’s no need to maintain it or anything. Once it’s done, it’s done.

Now, I’ve been meaning to ask this for a long, long time… And the last cohort, the one in December - there were some very late nights, and I have to say, I was falling asleep around like 12 AM… I think it was like four for the Asian timezone… How do you go from the AWS book and the courses to chopping boards? How did you make that – how does that fit?

Yeah, good question. I think it’s this cat and mouse bad idea, it’s like, I don’t label myself anymore as a programmer, or as a writer, or anything. To me, I keep my eyes open for opportunities… And the cutting board started – I started woodworking relatively recently, as a hobby, purely. I had no intentions of commercializing anything. I wanted to sort of make some furniture for the house, and I started watching YouTube videos, got interested, started doing it, liked it, and so and so forth.

[26:03] But as I was doing it more, I started thinking, “It would be nice if all the things that I’m figuring out, I could monetize some of these.” And I was thinking, “Should it be an educational project? Should I make some physical products?” I was starting to get tempted into the eCommerce space, because I had no experience with it. I was curious. And long story short - again, I stumbled onto somebody on Twitter who was talking about the hygienic properties of wooden cutting boards, and how much better they are, and how many studies there are that show that they’re more hygienic than even stainless steel, and glass, and whatever… And I thought I can make a cutting board; I happened to make some for my house, and what if I tried to sell them? They’re relatively easy to ship. I mean, they’re just a rectangle, and not that bulky… And I gave it a shot.

I created a few designs, I’ve set up a landing page, I shared it online, I got a few sales… To be completely honest, the cutting boards project didn’t really pay off as I was expecting. I was hoping I’d get some recurring stream of orders over time. I did get a flurry of sales, I made a few thousand dollars the first few months, but sort of the sales stopped. So that expectation that I had, that somehow they will keep happening - it didn’t really happen. And again, this cost me nothing to keep on the market. So if I get an order today, I could do it, and maybe if I get inspired to come up with some creative marketing campaign, I could always give it a shot, and so on and so forth.

But to me, again, this is like recognizing luck, as we mentioned in the beginning. Once you keep your eyes open to new things, you start seeing opportunities that if you have the blinders on, you would fail to see. Personally, I made a course on how to sort of build an audience on social media. That was probably even more drastic to me, because until a year before, I was completely ignorant on social media. I had never had a social media account, I never had a Facebook account… I had Twitter, but never had tweeted; just occasional scrolling through things. I never did anything in public. I was completely green, clueless; I don’t have a marketing background, or whatever… And to me, the fact that just a year later, literally 12 months, or even less, not only I gained experience on social media, but I was actually educating people… [unintelligible 00:28:22.25] for a long time. That was my best-selling product. It made over $300,000 in sales, it’s quite incredible to me… And to be honest, I don’t even know where people are coming from… Even today; I still make a few sales a day. Like, it’s bizarre. And again, if I restricted with myself with the labels of “I’m a programmer” - that’s what I did for almost 16 years professionally, and before that, when I was a kid, as a hobby for a long time - I wouldn’t have considered these opportunities.

So I highly encourage people, again, to let go of the labels… Yes, think of your skills, assets, everything you’re into, what you like to do. There’s opportunities in adjacent things. I like to say that with your skills, they should feel like an asset; you have the option to use them, but not an obligation. It is a mistake I did as well myself; when I jumped into self-employment, I almost felt I had an obligation to use my programming skills, because it’s a waste; it’s the sunk cost fallacy. I have it, I should use it.

Of course.

But why? I mean, it’s irrational. I should not feel an obligation to use it. Yes, I have the option, but there’s many other things I could do or I could try.

Yeah. So obviously, this approach, this mentality, and these ideas - they all start as ideas - they haven’t worked just for you. They worked for many other people that are in the Small Bets community. Are there some examples that you can share with us?

[30:03] There are a few. I’m not sure how willing they are for me to share publicly their numbers, or whatever… And success, again, is very relative. To some people – many people in our community still have a full-time job, and they’re not necessarily looking for, but they just wanted to have a portfolio of side projects. And these might be making sometimes just a few hundred dollars, maybe $1,000 a month, and for them it’s a big success, right? It’s something supplementing their income, exposing them to new things, giving them a fallback, so that if they get laid off or something were to happen, they don’t have to start from scratch. That is very, very reassuring.

There’s a few others who, yes, have taken a similar path, of starting with educational projects, mixing in software projects, other things, and going in many different directions, and have some highly unexpected successes in areas that they least expected… And to others, which I still – this might sound may be a bit… I don’t know what to call it; maybe a bit bizarre, or maybe… I don’t know. But for what I’m doing in the Small Bets community, I think even if people haven’t had success yet, the fact that they’ve been exposed to a different way of doing things is already, I believe, a success. The fact that the inspiration – “Here’s another way of doing things”, it’s knowledge. It’s some amount of guidance. And again, we have 2,000 members, many people join, in very different circumstances in their lives… Some people are curious, some people are tempted, some already are taking the plunge and working for themselves, want to make things better… So there are many different arrangements. But having a place where you can go share ideas, get feedback, have a support network of people who can help you sort of see a strategy that is much more prudent, and reason about it on a very pure, fundamental level - I think it’s very empowering. I try to measure success that way.

I like to use the example - and I shared it on our Discord recently - related to woodworking. Recently, I bought a book about how to make your own doors. Well, recently - about a year ago. And I read it all, I enjoyed it, I learned a lot, but I never made my own door. And maybe I never will. Was that a regretted purchase? No. Actually, I really enjoyed it. Actually, recently I was recommending the same book to other people; money well spent. It taught me a few techniques… But if the author of the book were to make a survey of who actually put these techniques in practice, I would have to answer no; I haven’t, and maybe I never would. But it was still a very satisfying purchase; the time I spent reading it was very well spent, and I recommend it… But what it gave me - again, showing me how a door is made, I learned something, some techniques here and there… And also knowing that if I did want to make a door, I’m not going to start from scratch. I have a reference that I could refer to.

I think it’s a similar thing over here - out of the 2000 members, I’m sure maybe only a very small percentage actually put everything in action, and are living off their projects. But there’s a wide spectrum in between; some people are just getting started, some are just waiting for the right circumstances to happen, but they have something to fall onto if they wanted to.

Well, if anyone is interested to see who is out there applying these skills, these ideas, you can always go to Daniel’s Twitter. Sometimes you retweet what other people post… So you can check it out, see what examples are out there. And that is a very real world view as well. Real time, what is happening, not just when we recorded this. So going back to AWS - you were a software engineer for 16 years.

Then I took a rest for nine years, but before that, I worked for other companies. Yeah.

[34:06] So what was it like for you to be working at AWS as a software engineer? I’m assuming you also had – was it always a software engineer? Or did you go into management?

No, I was in a bit of a hybrid role in the last couple of years, but my official title was always a software engineer.

Okay. What was that like for you?

I went in thinking it was temporary. I think I always had the inclination that eventually I will want to work for myself. I grew up in a family of self-employed people, and I always sort of felt it’s also in me that I want to control how I work, what I work on, and so on and so forth. When I joined, I thought this was temporary; I just want to see how the sausage is made in a company like AWS, and I wanted to learn, and so on and so forth. But I think I fell a little bit into the corporate trap of – you know, I kept getting promoted, I kept being treated reasonably well… They offered me to move to Seattle, I came… Again, they kept increasing my pay beyond my expectations; when I was about to leave at one point, they almost doubled my salary. It was very hard to think of an alternative that would have been better financially. Like, if I had to leave to work on my own, just the gap in time until I start making money probably would – again, if you’re thinking just financial expectations, it made it very difficult.

And again, it wasn’t – despite Amazon’s reputation, it wasn’t harsh work, or super-long hours. Yes, it took all my creative energy, that’s for sure, and it was always something on my mind… But for a while, there was a period when I started to think “This isn’t for me. Maybe I’ll move companies. Maybe I’ll go work at a different company eventually”, but I thought this was what I was going to be doing… Until I think at one point – it was actually, to be honest, a post by DHH, that I think triggered in me to consider… I think it was in 2015, November 2015, I was on vacation, I was sort of somewhat, again, a bit confused about the discrepancy between sort of me thinking I’m going to stay as a full-time job and the situation I was in… And there was this great post by DHH [unintelligible 00:36:28.13] The topic was mostly about considering, again, the all-in venture capital approach of making software, where DHH was recommending people to reconsider that approach, and start something smaller, more prudent, more modest, and so on and so forth. And again, I felt it was much more empowering to me. As I was reading that, for some reason, even if it wasn’t the intention of the post, it made me realize that a career as a full-time employee wasn’t for me. I started thinking of all my peers, my bosses, my bosses’ bosses, and I realized that they were living a lifestyle that I didn’t envy at all. I don’t want to become one of them. Probably they were worse off than I was.

So no matter how much more I was going to get promoted, or how much more money I was going to be making, I was still going to be working on somebody else’s terms, on their own schedule, without lots of control over my time. And I’m not saying this is the right thing for everyone. I think it’s important for us to recognize our personality. But for me, it dawned to me that this was wearing me out mentally, probably even physically, and I needed to find another arrangement.

So after that, it was mostly – I spent another couple more years there, just figuring out when’s the right time to leave, and at one point I wrapped up a project I was working on and I just took the plunge without anything concrete there. Long story short, nevertheless, I think I did learn some things, that I probably should have left sooner, in hindsight…

[38:03] But my takeaway for me personally is that I realized almost for sure that the full-time work arrangement, nine to five, Monday to Friday, 40-hour workweek wasn’t going to work for me, even in the most ideal situations. Even when I have a reasonably cushy job, well respected, highly paid, getting promoted, without any major dramas or challenges. Even when everything was well, it was still a problem for me, right? And that sort of made me realize that I can’t just be trying to optimize this… Putting lipstick on the pig, or what do they call it?

Yeah, that’s a good one… [laughs]

That I need to make a radical change.

Yeah. Okay. I think this conversation is really timely, because many people, with all the layoffs in the tech industry, may be worried about their job, or maybe they have lost their job. What would you say to those people?

I think it’s important to recognize, again, to recognize what our true, real preferences are, and to be really, really honest about ourselves. It’s very easy to get fooled by signals from the outside, and what our friends are doing… We’re all slightly different, and I genuinely believe this - it doesn’t really matter what other people are doing; if we feel deep down that structured work, highly structured work, for example, is not ideal for us, I think it’s important to start treating full-time employment as temporary.

Yes, circumstances might require you right now where you want to keep up with it for a while, maybe for immigration issues, maybe for family, you’re just about to have a baby, it’s not the right time to make a big change - I understand those things. But once you start to see things as temporary, it’s beneficial, because now you start thinking of the next thing, and you start optimizing for that.

Probably the worst thing one can do is be in an arrangement that is incompatible with their preferences. I think that’s the biggest opportunity cost. In the modern world, when we talk about opportunity cost, we tend to think about financial opportunity cost. “Oh, I was doing this, I was making $100,000 a year, but I could have been doing this, making $150,000 a year.” I think the biggest opportunity cost in life is living a lifestyle that you dislike, that isn’t the ideal one for you. So sort of understanding that, and reflecting on our experience - how do we like working? Do we like to have somebody who tells us exactly what we should be doing? I’m certain there are people who flourish in that arrangement. “You know, I’m just a soldier. Tell me what to do. I’ll do it to the best of my abilities. I will be super-proud of it, super-fulfilled.” Perfect. Nothing against that. I think if you recognize you’re that kind of person, look for those kinds of opportunities. Don’t look for ambiguity and lack of structure, but the opposite; look for structure, look for precision, and follow that.

But if you realize that you’re the kind of person that will flourish when you have an open schedule, you don’t have somebody telling you exactly what you want to do… You want to wake up in the morning with nothing planned, and you just go aimlessly and you still sort of manage to do things - you probably would want something less rigid. And this could be the next step; it doesn’t necessarily need to be super-radical. You could transition from full-time employment to freelancing. Maybe if you were just laid off, and you’re that kind of person who eventually would want to take more control over their time, maybe the next thing to do - don’t try to find a full-time job. Try to do financing; use your existing skills. Maybe even you offer your freelancing service to your previous employer. Maybe you got laid off, but maybe your employer would be willing to bring you on for 10 hours a month to help with some ongoing things.

Yes, it’s a trade-off, you might lose benefits, or whatever… But again, what you’re gaining instead is you get much more flexibility with your time; you can add more clients now. You can take time off without asking anyone’s permission, right? And you can start to, again, build reputation, build testimonials, get a well-oiled machine of how to charge clients… And so on, and so forth. So it needs to be an incremental step, and then over time, again, adjust along the way.

[42:06] And I mentioned the two extremes, and you could be in the middle. You like a bit of structure, you still would want to – again, bringing back the DHH, Jason Fried people, I’ve read almost everything they’ve written; they seem to like some structure. Both of them, I think, they like to say, “I work from 10 to 5, and I go to my room, and after 5 I forget about work.” So it’s different than how I work. I don’t have fixed times, and I’m probably even less structured than that. Totally fine. Again, if you think that’s important for you to activate your creative energy, that you need to lock yourself into your office and say “This is work time”, and so on and so forth. For me, it’s just whenever I feel inspired. I almost can’t make myself productive unless I feel there’s something important. And then, whenever it is, wherever I am, I will be productive.

But I learned this over time, as I was living my life, and I think what I did right is I acted on it, instead of just saying “That’s suboptimal.” Eventually, I took the plunge and I changed things. And I keep changing them. There’s still some things that aren’t perfect, and I keep adjusting with it.

So I was thinking more long along the lines of the embracing change philosophy, and change being constant, and randomness, where people - they want to have that safety, they want to have that structure… But structure more in terms of “This is where I work. I’ve been working here for nine years. I see myself working here for at least another nine years…” But things change. So for those people I think it comes as a shock when that happens, because they were not expecting that. And it’s not a matter of it being right or wrong, it’s a matter of something unexpected happening and them feeling somehow cheated… Like “It’s not right, it’s not fair that this is happening.” So I think for those people it’s important to realize that the only constant thing is change. It will keep happening, whether it’s AI, whether it’s automation, whether it’s frameworks… They keep coming, right? And it has nothing to do with you yourself personally, right? People take it as like a personal failure. And I think they shouldn’t. I think they should understand that things are very volatile right now; things are maybe even more random than they were last year. And the financial sector is in a bit of a turmoil, there’s like some very real world-changing events happening right now, which have an impact on everyone. And as a result, that trickles down, or trickles up all the way to the tech industry. It’s not immune to these changes. So I think there’s a lot of wisdom and in what you share around randomness, around uncertainty, around trying things out and seeing what sticks, and what makes sense… And not being afraid to try things out.

Yeah. And I think one technique that I really like is the idea of negative visualization, that I think applies to everyone, no matter on what end of the spectrum you lie, whether you prefer the structure, stability, whatever, or more chaotic sort of arrangements… You should be thinking of what would happen if what I’m living right now gets disrupted? What if I were to lose my job? What would the consequences be? Would I be able to recover easily? Will I be able to find another job quickly? Would I be able to keep my current lifestyle? Would it affect me significantly? And if you convince yourself that things are fine, then you’re in a good spot. I think you sort of suddenly realize that there’s not much to worry about, and whatever happens, happens. That you will be able to react.

[45:53] But if you realize that you’re in a bad spot, that you’re unlikely to get hired maybe because your skills are now – you know, something I realized for example when I was working at Amazon, in these senior positions, at big companies… There’s probably only maybe ten companies in the world that would want that kind of level or that speciality, because they’re senior executive directors for some specific thing that maybe only Amazon, Google, Microsoft, and maybe Facebook would ever want. So what if those five companies were suddenly to realize they don’t care about this act function anymore? What would it make to you? Would you be able to do something different? Would you want? Would it affect your dignity, or your pride, or would it affect your lifestyle, because you’ll make significant less money? Are you prepared?

So it’s not a pleasant thing to think about the bad things that could happen, but I think it’s a technique to, paradoxically, improve your peace of mind. In my course I like to use the example of the preppers, the survivalists, who worry about a volcano erupting… What do they do? They don’t just worry about it and say, “Oh, hopefully it won’t happen.” They prep. They stock their bunker with food and medicine and water and fuel and whatever… So they don’t want it to happen, but if it were to happen, they know that they have reasonably prepared.

So I would recommend everyone to do this… To think about the worst-case scenarios and how you would react to them. Sometimes you realize all you need is a little bit of planning; maybe you can buy some insurance, maybe if you have some emergency fund savings, you’re in a much better spot… Maybe you realize you need to reskill yourself, to retrain yourself, you need to know some other things to be able to fall back to them if they were to happen.

Some of the people in our community like having some side hustles for this season, to know that if I were to get disrupted, I have something independent that’s going on. Yes, it might only be 10% of my income, not something significant, but if I were to get disrupted or affected significantly, there’s something I could fall back to, and eventually I could [unintelligible 00:48:02.29] which is much better than going back to square one, starting from scratch.

Yeah. I think that what you do is really important; what you do in your job is really important. I think you have the same mentality, because I’ve seen you quoting Leonardo da Vinci… It was just a screenshot, where Leonardo - he talks about what he does, not who he is, or what he is.

Yeah, the labels thing. I really like that. So do not describe yourself with – I’m not a programmer. I can do this. Like, once you automize your assets, your skills, I think, again, you start seeing opportunities. Leonardo da Vinci - he could have called himself a sculpturer, or a painter. But there were a million other things he could do. And I think, of course, nobody’s like Leonardo da Vinci probably, and maybe nobody ever will be… But I think it’s a good attitude to think of ourselves that way. “I can write. I can manage a team of people. I can do some basic web design. I can program. I can do some woodworking (completely unrelated). I can do some DIY around the house. I can fix leaking toilets.” Of course, not everything is conducive to a commercial opportunity, and maybe I wouldn’t want to… But once you just with yourself think in these terms, you start seeing other opportunities, that you would be blind to if you just think in labels.

Yeah. So to continue on that thought, I’ve read somewhere - I can’t remember where - that you also happen to be head of product at Gumroad. Is that true?

I used to. So I did this for a couple of years. And this was another thing, actually, related to what I’ve been talking about. So long story short, I was using Gumroad to sell my own products for a while. I got to know the CEO of Gumroad, Sahil, over Twitter, just because - you know, business relationship; he used to ping me with new features, ask my feedback, so on and so forth… So it was a bit of a warm lead there.

[50:04] One fine day, random day, it was August 2020, pandemic period, I remember I was just scrolling Twitter… And I saw Sahil posted a “We’re hiring” tweet. And it was mostly programming jobs in areas that I had no knowledge in; sort of Android development, and some other things… But I clicked out of curiosity, because it was part-time work, high hourly rate, and I was curious at Sahil was doing.

At the very, very bottom of the page - it was a long page, with lots of technical job openings - there was an asterisk, and Sahil said, “Eventually, I’m looking for somebody to help me with product management at Gumroad.” And I thought - again, I never had a product management role in my life, specifically it was never my title, my job description. Nevertheless, for my last two years at AWS I was almost hybrid software engineer/product manager/team lead; sort of I was doing a bit of jack of all trades. I was [unintelligible 00:50:57.18] team. Our real manager had left, and we couldn’t fill the vacancy, so I was sort of doing lots of different things. And I enjoyed it, I thought I was reasonably good at it, and Gumroad happened to be a product I was using every day; I was recommending it to people, because I enjoyed the tool, very simple to use… And I got to know Sahil a little bit… And I sent him, an email; and I wasn’t looking for a full-time job or anything. And I told him – and again, this was literally a couple of hours later. Slack in the system; I didn’t just say “Eventually.” I reached out immediately. I said to him “Look, I don’t know what you’re looking for; I don’t know if you’re looking for something part-time or whatever for this, but I was wondering if you’d consider not even part-time, but a quarter time though… I could maybe do (I said) like 10 hours a week on average.” And I told him, “As you know, I use Gumroad every day, I have some good ideas. I worked as a de facto PM for a little bit, even though it was never my official job title. I love Gumroad”, so on and so forth.

We jumped on the phone the next day< and I started doing it. So I did it for a couple of years, until May of last year, I think. I was doing this on a very – it was a freelancing gig, essentially. It was a contract type job, helping the Gumroad engineering teams sort of prioritize things, prioritize features, scope features, talk to customers and figure things out, things like that.

One thing in my portfolio - again, in the meantime I was doing several, four or five other things… But this was a nice income stream; eventually Gumroad grew so much that it sort of became almost impossible to keep up with everything happening. That’s why primarily I stopped, because it was quite a nice arrangement, but it sort of became too difficult. And again, I wasn’t looking for a full-time job. That was very important for me. 10 hours a week was the most I could dedicate, I wanted to dedicate to a single activity like this. Once I started thinking about 20 hours or more, it started to feel “I don’t want it to be that big.” So yeah.

That’s very nice. Thank you for sharing. Okay. So you were a software engineer, now you’re a jack of all trades: whatever takes your fancy. No labels. We already cover that part. I’m wondering, how do you take your ideas and put them out in the world. I would call it “ship it”, just to go with the show… But how do you go from idea to actually putting it out there? Gumroad is obviously one platform that you use to publish your content… But what does it take, for example, for you to get your website out there? I’m basically asking about your tech stack, and your setup, and what you run.

[53:50] To be completely honest, I think it’s probably one of the least important things to me. Whatever it’s easiest. I like Gumroad, because it was less friction. The fact that Gumroad had a well-defined style, I didn’t have to think about what fonts to choose, what color to use, whether the title should be 24 pixels or 25 pixels… I liked those constraints. I’m not necessarily saying everyone should do this, but for me it’s easiest. It’s a tool I’m familiar with now, so it’s probably even more – I gravitate even more to what I’m familiar with.

To me personally, the most important thing when you launch something isn’t your tech stack, or whatever, it’s how you’re going to get attention to your product, and how you build credibility with what you’re offering… Which are obviously not engineering or technical topics. Because to me, if you put something online and nobody hears about it, it’s as if it doesn’t exist, right? And if you can’t build trust, and you managed to get attention, it’s also the same thing. People will bounce the site off and nobody will close a transaction with you.

And by the way, actually, related to Gumroad, I think putting something on Gumroad helps a little bit; not a lot. But by placing something on Gumroad - many people use Gumroad every day. It has - I think Sahil shared some numbers recently - millions of buyers per month, or per year, I forgot. Many people already have their credit card saved on Gumroad. It’s like buying something from Amazon. There’s some small trust. Sure, it’s not sufficient. Probably the creator needs to have much more trust, but it’s something that helps a little bit. So it’s one factor that might help me choose one tool versus another.

But what’s most importantly is “How can I bring attention to this page? What am I going to use? Is it my Twitter audience? Is it my email list? Is it search engine results? Is it paid ads? Is it word of mouth? Is it talking on public forums, communities on Reddit, Hacker News?”, whatever. And once I get people, how can I make them trust that what I’m offering them is what they’re looking for. And you can do that with testimonials, success stories, with your own story, putting your own skin in the game a little bit if you can… Many different techniques. And I think that’s what people should be focusing on, more than the tech stack. The tech stack, whether you use WordPress, or SquareSpace, or a static HTML file on some S3 bucket, whatever it’s easiest to – again, I would recommend people to choose the simplest things, just because you don’t want to be wasting time, or spending too much energy, or feeling that there’s friction. You don’t want anything to be daunting, that you keep putting it off; you want something to get over with it. And I love Gumroad for that case. Like, you literally can start selling things by picking a name, setting a price, and you basically get a link, and if people visit it and pay, next week money will arrive in your bank account. It almost can’t be easier. And of course, you can keep optimizing it, you can keep adding images, and demos and whatever… But it’s all optional.

Yeah, that’s very wise advice, again. Do the simplest thing for you, without wasting too much time. If simple means wasting a lot of time, then reconsider that.

And remember, you always have the option of improving later, right? Rarely you paint yourself in a corner with these things. There are some cases where you could, but I think most of the time you can always optimize, and improve, migrate, or whatever.

So this year, to me, it feels like it started yesterday. Obviously, it’s been almost a month now. So we’re still in January, but by the time you’re listening to this it’ll be February. So even though one month out of 12 are gone, I’m wondering how do you think of 2023? Do you have something in mind that you would like to do, something that you’d like to try this year?

Honestly, nothing very specific. I got to approach it like I’ve approach 2022, 2021 and 2020, with just an open mind, taking care of my downside. My main concern, my only goal, I would say, is to sustain my current lifestyle and to not go back to a nine to five job. I know it’s not the end of the world if it were to happen, but for me it would be a significant lifestyle downgrade.

[58:10] So the attitude of doing whatever it takes to maintain this, I think it’s a helpful attitude for me. As I mentioned before, I almost feel incapable of being highly creative, highly productive, unless I feel the need to. So right now things are going well, I have sort of this routine, I’m doing these regular cohort courses, I have the Small Bets community, there’s a steady stream of people joining, things are going well; I don’t feel I need to do any major changes… I have some plans to improve things, working on some small improvements here and there, but nothing radical.

But again, I recognize that this thing might not last. No idea whether by the end of 2023 it’s still going to be working as it is today. It could be much worse, it could be even better, or anything in between. But I’m fine with that. I’m still with my eyes open, and if I run into some idea, some opportunity, I have lots of slack in the system right now, mostly in a state of wandering about, waiting to pounce on something… And to me, basically, after the year that started, I would have been incapable of predicting how it’s going to be ending. So if I were to get this question, at the end of 2021 I would have certainly not predicted how 2022 would have finished. And same thing for the previous year.

So I think I would be foolish to try to predict where 2023 will end, and again, for the type of personality that I have, I think I like it this way. Some people might say, “Oh my God, it would be a nightmare for me to not know what I would be doing, how much I would be making”, but I realized actually I think I need this… Because if I don’t have some variance, some unpredictability, some ups and downs, I lose almost the drive to actually do things. If things are too steady, I become incapable of working. So I recognize it, and when things are good, I take it easy; when things start to show some signs that they need some correction, I don’t need to convince myself that I need to work harder, or try other things. Suddenly, almost another part of my brain activates, and I become super-motivated. Again, I start seeing better, new opportunities, new ideas, maybe new, creative ways of marketing my existing products and services, and so on and so forth.

So a vague answer, unfortunately, but –

No, no, no. That was spot on. Honestly, if people know you, and they’ve been following you for a while, this matches everything else you’ve been putting out there. This is you.

And I would add, I think this is a common theme that I’ve been hearing with many other creators and entrepreneurs, that what they’re doing right now is something that a year ago, two years ago they would have never imagined to be doing. I think there’s an important takeaway about that, because again, we tend to think that our imagination knows what’s best for us, what’s the ideal business, what’s our dream job, and whatever… But then we stumble into random things, and we realize “This is it. We would have never imagined to be doing these kinds of things.” So the openness to that I think is very important… And sometimes having these very specific visions can, again, harm us rather than help us… Because then we ignore everything else that’s not conducive to that one specific thing.

I’d like to say - you know, New Year’s was relatively recently, and many people put new year’s resolutions, some that are professionally related, “I want to finish/publish a book before the end of the year”, or something like that. And I dislike these very specific things, because again - yes, it might be a noble goal to try to do something like that, but you condition yourself to ignore everything that’s not related to publishing that book. But you could bump into something that’s 100 times better for you, that you will probably enjoy much more, and it will probably give you a much better payoff, in the middle of the year… But if you’re so focused on the book, you’re almost going to ignore it, because it’s distracting for your goal.

[01:02:26.29] So it’s okay to have goals that are broad, for example “I want to be able to cover my expenses with my self-employment income this year”, because there’s a million ways to do that. “I want to continue to live my current lifestyle” or “I want to make $100,000 before this year” - that’s a decent goal, because there’s many ways to do it. But the very specific ones, I think they tend to cause more harm than good. Yes, the specific goal might make you reach that goal, but the downside is that you might have missed out on many things that you could have stumbled on, that you couldn’t even have imagined on your own.

Yeah. You mentioned $100,000 per year, which reminded me of something that you wrote not that long ago… “Y’all need to make six sales per day of $45 each to make $100,000 per year.” I think that puts things a little bit in perspective for people that think it’s a huge thing. It’s not. With the right approach, with the right openness, with the right opportunities coming your way, you not being too busy to even see them, or not have time for them… Which is why, again, going back all the way to the beginning, having that slack, having that open mind, being relaxed… Not being stressed all the time, not rushing everywhere, will make things happen for you, in a way that nothing else will.

Okay, so as we were preparing to wrap up, for the people that stuck with us all the way to the end, is there a takeaway that you’d like them to have from our conversation?

Yeah, I think what I’d like to recommend people is to recognize that life and business are much more random than they seem. A mistake that I think we tend to all make, and even I make sometimes, is just believing that things are much more linear… And I think, especially in business, the things that help us succeed in a much more predictable environment, like our full-time job, or when we were still at school, you’re given the syllabus, you study those things, if you work hard and you study the right things, you will almost automatically move to the next level, so it’s almost like a video game… In business, it’s rarely like that, right? There are some business activities where that might be true, but in general, especially when you’re creating products or services or doing things like that, what helped you in those domains not only they won’t help you, but sometimes will harm you. I think when you’re dealing with something very randomness-laden, you need a completely different strategy. Rather than sort of just hard work, you need to tinker and experiment with different things, rather than optimizing; you need slack in the system. Rather than focusing on the goal, you need to focus on your downside, on your staying in the game, because you don’t really know what will end up paying off…

[01:05:22.12] So what’s critical is just to avoid a game overstate. And then lots of small, different techniques that I think become obvious and more much more clear once you realize that you’re operating in a completely different domain. That what works isn’t predictable, the payoffs are not very predictable… Whereas when we’re working in a much more predictable environment, like a full-time job - yeah, you’re told by your boss “If you do all these good things, you’re very likely to get promoted” - yes, there’s some randomness; maybe you won’t get promoted this year, maybe you have to wait another year, or another quarter, or whatever… But the domain of unpredictability is very limited. And if you were to get promoted, you know more or less how much you’re going to be making. It’s probably not going to be a million times more; you’ll probably get a 10% raise, or a 20% raise, or whatever… Things are easier to reason about in that world. But in most other business activities, all those things go out of the window. You could work as hard as you can, put all your time and effort, you could be seen as skilled, extremely motivated, do all the validation things and whatever, and yet your payoff might never materialize. And this could be very discouraging. Discouragement is actually a very ruinous thing, because it can lead you to that game over state. Not necessarily financial; you don’t need to go bankrupt to get ruined. It could be just a mental discouragement.

So I think the antidote to this is, again, very prudent risk-taking, reducing the efforts we put, tinkering, small experiments, taking care of the downside, negative visualization, “What would happen if this project that I’m working on doesn’t work out? Will I become depressed? Will it put me in a bad financial situation? Would it harm my reputation?” All these things are important things to cover, and make sure that you adjust your inputs to be compatible with your risk appetite.

So I hope that helps people, or at least give them some food for thought… Not necessarily to embrace everything, but at least to reconsider how to approach highly uncertain activities that are different than a project that your boss might give you.

The predictable world versus the stochastic world. That was one term that - even though I have heard it before, small bets, it really stuck with me the way you presented it; the way you made people think what type of game are they playing. Because it’s all a game at the end of the day. We are Homo Ludens. We love to play. And if you don’t see that way, it’s not as fun, I have to say. So what type of game are you playing? That’s important.

Or you happen to be playing. Sometimes I think we don’t recognize - are we operating in this world, or the other world? So recognizing it is important.

Alright. Daniel, it’s been an absolute pleasure. Thank you very much.

Thank you, Gerhard. This was great. Good conversation.

Have a great day, everyone.

Thank you.

Changelog

Our transcripts are open source on GitHub. Improvements are welcome. đź’š

  0:00 / 0:00