Framework for What's Next

June 13, 2021

Just over three months ago, I left my job.

I then immediately packed my bags, and jumped through what felt like a million hoops (and many sticks in the nose in the form of PCR tests) to go to London. The intent was to forget about all professional endeavours for an indeterminate period of time.

To some extent I was successful. I'm now a much better cook. I also spent my time on some self-indulgent activities (like rebuilding this blog, from scratch, using totally unproven tech, which I'm sure I'm not going to regret later /s). And I launched a podcast – a bit of a full time job masquerading as a passion project.

When I made the decision to quit my job, I also made a promise to myself to take a very long break before jumping back into any serious endeavour. I still intend to do that. However, illustrating the fact that you can change your circumstances but you can never escape your mind, I have been incessantly thinking about what I'm going to do with myself next, and I have come up with a bit of a framework.

No Jobs

For all intents and purposes, I'm forsaking full time jobs. First reason for this is autonomy. For me, happiness comes from a calendar I control. I want to be solely and exclusively in charge of how I spend every hour of my life. Of course, this is not always possible, but it is a guiding principle.

When I contemplate the amount of money my peers make in our industry and how cushy big-company jobs can be, I wonder if I'm insane for foregoing that. But I think about it this way: if I was on my death bed, how much money would I pay for an extra hour of life? Every hour of life spent on bullshit meetings or dealing with arcane bureacracies with ladder-climbers of questionable intellect is an hour of life lost.

Many people get this trade completely wrong - they effectively value their time at $0 and will take any amount of money over none. I like to think of my death bed and work backward from there. Will I miss more money? Beyond some minimum threshold, the answer is a resounding 'no'. Will I miss my time? Absolutely.

Never say never. I can think of a few founder-led companies with missions I could get behind. But they're few and far in between.

One of the consequences of autonomy and spending time exactly how you want is that the phrase "work/life balance" becomes meaningless. There is no "work" and "life". There's only "life", and what you choose to spend it on. People need this "balance" because one of those two things makes them miserable, so they're keen to get more of the other. My goal is to have a happy, fulfilling life. My work will be a big part of that, so it better be pulling its weight. If I'm dying to get away from it at 5 PM, I've failed.

Focus on Compounding

Compounding is truly a wonder. Consider this: today Amazon has an entreprise value of $1.8T. In 2016, this number was $300B. Amazon was founded in 1994. It took 22 years for it to reach a $300B EV. But it only took it another 5 years to add $1.5T of its value. Even as I write these numbers, my mind struggles to comprehend the scale.

Compounding needs two key ingredients: a strong operation and time. By the former, I mean a business operation that gets a high return on investment. If you have such a business, the next step is to give it as much time as possible for compounding to work its magic. Selling such a business may provide cash earlier but is almost always a bad move.

While selling my last business was probably the right decision at the time, it came with the disadvantage of a hard reset. Except for my experience and my capital, I'm not building anything on top of my past work. As a general rule, I want to avoid this in the future, and I'm looking to start businesses with no exit strategy.

Selling a business only makes sense under two conditions:

  1. If the price is so stupidly high that it more than accounts for all possible future growth.
  2. If the management cannot get a reasonable return on the invested capital.

If you're suffering from (2), you're either in a bad business or you have bad management. Chances of (1) are pretty slim. I'm looking to avoid (2). I will likely never have to deal with (1), and if I do, it'll be a good problem to have.

Unlimited Upside

My last business had a glaring flaw: even in the best case scenario, if we absolutely dominated our market, it would always be a small business. We were addressing a tiny market in Canada, and while there was money to be made (and yes, compounding could have still worked wonders over a long time), we were fundamentally limited in what we could do with it.

You don't need to worship at the altar of never-ending growth, and I would prefer working in smaller companies rather than big ones. But the reality of building a business is that you will devote a significant portion of your life to it, so you might as well get the most out. Compare yourself to Jeff Bezos before he started Amazon: you and him have roughly the same capital to invest in the early days: 24 hours in each day. The difference in outcomes thirty years later is in where you each decide to spend your time. If Amazon was constrained to serving the Seattle market, we would never have heard of it.

That's something I want to avoid this time around. I don't know if I want to raise VC money or remain fully independent, but I sure don't want to work on something where the best case scenario has a low cap.

A high school friend reminded me a few years ago, in grade 10, I declared that "I will make $1M by age 30 or I will kill myself!". Thankfully, I'm still here. But I learned that the goal was insufficiently lofty.

Now, I have a new goal: I want to make $100M by age 45. The money itself is only a proxy for what really matters: I'm going to work hard anyway - I might as well work on something that's sufficiently challenging, exciting, and invigorating. I'm not going to kill myself if I don't hit this goal. But if I aim for it, chances are I'll work on something worthwhile.

So how will I make $100M? I have a simple formula: avoid doing things that are guaranteed not to make $100M and then simply stay in the game long enough to get lucky.

The challenge with a hard reset is that when choosing on what to work on next, the solution space is far too big. The framework above is a first attempt at culling the possibilities. As a next step, I'm exploring a few specific fields more deeply and assessing if each of them is something I want to pursue. To document that journey, I'm starting a newsletter. For the immediate future, I'll be researching the world of cryptocurrencies and decentralized finance and writing about my findings there. If you're interested in coming along, the sign up box is in the footer of this site. 🙂