Scalable vs. Non-Scalable Careers
ben.casnocha.com
ben.casnocha.com
I find most of the talk like this pretty irrelevant, do what you enjoy, then if you really want money, figure out the best way from there. I would much rather be an expert in the career I chose than be a "Career expert"
Let us, then, limit this discussion to the average career person. The average Wall Streeter was making $300,000 a year 2005 - 2008. The average software developer is making, i think, 75-80,000 a year. And so on.
Just pick something that you enjoy, then you have a better chance of doing better than the average, and if you dont make your millions, then youve enjoyed the ride.
If you know of a career that excites you like no other, consider yourself lucky.
I've been an early stage employee (< 10) at 4 startups over the past 10 years and I haven't made a dime, relatively speaking. These weren't obviously doomed startups, either. At least one of them is still wistfully mentioned by other successful software entrepreneurs as an inspiration[1].
It is a bit trying on your psyche when personal friends have 10s of millions of dollars and you're scrambling to justify why you want to get paid $100K. In a down economy, you often are scrambling to justify why you want to get paid $60K or should be hired at all. At these times those jobs where even the worst get paid $150K sound like a better idea.
Of course it's not all about the money but your landlord, wife, kids, potential dates, aging parents, car salesman and cellular data plan provider will tell you otherwise.
[1] None of whom actually worked at that startup
2.5 years later and I've earned a bunch more stock grants, but my salary has stayed flat (my choice -- we were on a good trajectory so I always preferred stock options over salary bumps). Now our prospects are not looking good and I doubt there is any upside to the stock.
I definitely considered this scenario when deciding to join the startup, and I always rationalized it as "at the very least it will be a good experience". Well, it definitely was good experience, and I learned a lot more at the startup than the BigCo, but as I consider my next career move I'm not exactly sure what the right move is.
Who knows, w/ the economy how it is I will probably just have to take what I can get :).
Liberal industry culture lets founders move in and out of startups, consulting and full-time arrangements. High compensation lets founding teams take sabbaticals often. If one has a reasonably low cost of living and a solid hourly rate, working 1/3 of the year vends 2/3s startup time.
Given that PG has said many YC founders are older, I'd expect they've moved into the low-risk category, extra responsibilities of life included. And the cost of software startups keeps coming down.
Edit: ignoring non-software, here.
But I'm not comfortable starting up a company and going bankrupt. So if I was involved in a start up that ended up going bankrupt, how would that affect my career options? Is the employment rate for founders of failed executives high because a lot of jobs are open to them, or because the ones who can't find jobs end up quickly leaving Silicon Valley?
I realize that this probably isn't the right attitude to have if I would take a risk like founding a company. I'm just trying to decide how comfortable I am with the worst case scenario.
And I actually moved into Silicon Valley, coming off a failed startup. I'm not sure I could've gotten my job here otherwise.
What about doing both: swinging for a double for a while, then swinging for the fences (saving up money, then taking up to a year to try a startup)? Or, swinging for a double during the day, then swinging for the fences on the side, until you're successful enough to hit home runs full time (37S model)?
Put differently, scalability does not imply high-risk. In the most literal sense though, non-scalability does imply limited potential reward.
The scalability idea points to the fact that starting a company while your working for someone else is not a bad idea. If you can make 100K-200K doing a 9-5 job then you should keep it and keep trying to start businesses until you succeed.
Live cheaply and execute as many ideas as you can. Ie your job is your VC. Now this is obviously not easy but if you can build the emotional and hard-working capacity for this I think its possible.
For example, a big rock band may have to show up to do a set, but the dissemination of their music (i.e. advertisement for their live shows) is now highly scalable.
($1000 tickets for upcoming Phish show: http://www.nytimes.com/2009/03/05/arts/music/05phish.html?pa...)
I think the grandparent's point is that some careers have multiple business models, some of which are scalable and some of which are not. So scalability is not a property of the career, but rather of a particular revenue stream. Heck, many firms do both, like his example of a rock band, or like the software company that both sells a product and then makes money supporting that product (eg. RedHat, 37signals, and Fog Creek).
However, if you focus on how you get paid rather than the cost of marginal increase in the big-picture sense, are there any purely scalable careers? Every scalable job has parts where you need to be present, from writing books to writing code. Clearly skills like writing well and proficiency in coding can work for most multiple jobs; you can just as easily be a journalist instead of nonfiction writer, for example.
Regardless, it feels great to be able to code. It's something I love to do, and can take different forms with every job. Sometimes, life is just good.
It gets a little complicated because in a profession that's innately scalable (like computers, writing, or any sort of IP), the distinction between scalable and unscalable business models usually comes down to who's bearing the risk. So, if you're an entrepreneur, you front all of the fixed costs of developing the product yourself (or you get investors to do it in exchange for equity). In return, you get all the rewards if it's successful. However, if you're an employee, you sell your labor for a fixed price (= unscalable, since you have only a fixed amount of time), and then the company bears the risk of the product not succeeding in the market.
Personally, I think you should think of an employer as an insurance company: they underwrite the risk that your venture will fail in the marketplace, in exchange for taking the vast majority of the rewards if it succeeds. Whether or not this is a good tradeoff depends a lot on things like external economic circumstances, your skill level, ideas you have for new markets, etc.
There's some resonance between the scalable & non-scalable revenue streams. The details of what one does in the non-scalable portion can be massively amplified in the scalable portion.
It's as if, for some combination of business models, the quality of the non-scalable aspect becomes the exponent for the scalable aspect:
r = s^(nt)
revenue = scalable to the power of the non-scalable * time
Versus a pure non-scalable play, like straight consulting:
r = nt
Says who? In my experience, "career experts" want to make sure their advisees get a decent job. If 90% of people who follow your advice fail at their career, I'm betting you don't stay a "career expert" for very long.
Consider how much you can earn as a doctor or lawyer by choosing a lucrative specialty and working to establish yourself in the field -- why does he discount that? Because he's selling a dream, not a career. It's hard to fantasize about going to medical school, doing a residency, and then doing further postgraduate work, especially if you're already out of school. It's easy to fantasize about entrepreneurship.
Nail, head.
HN is entrepreneur-porn.
Indeed. HN can inform and motivate.
But simply reading HN also satisfies the startup itch a little... and can thus wind up being an ersatz substitute for the real thing. For each person HN encourages, it might also satiate another in place.
Does the compensation of "career experts" actually depend on the success of folks who they advise?
I don't mean to preach here as only you can know what kind of life is good for you at the time. But I think there's a immensely deep question beyond; that's why realising what you want is so damn hard in practise!
The reason I'm insisting on this is that I'm slowly beginning to hit the hard wall myself. I don't fully trust life myself either, yet. Trust also means letting go of lots of things you've believed that are important but which you're only attached to. Still, I'm afraid I can't prolong the current state of affairs for too long.