Welcome back to the episode of the Startup Therapy Podcast. This is Ryan Rutan, joined as always by Will Schroeder, my friend, founder and CEO of Startups.com. Will, as we record this, it is the first week of January 2024, amazingly. We've taken a little bit of a break, so hopefully everybody listening is as eager to hear our voices as we are to share
all of this pent-up Startup Therapy from over the holiday break. Being that it's January, one of the things that we know is there's a lot of new years resolutions get set and a lot of those have to do with starting that business, you've always wanted to start. So there's going to be a lot of people coming out of the gates really hot right now thinking, is this the time to start my business? Should I risk my paycheck that I have my stable income or not? Should I put that on
the line for a larger return? This is often part of the calculus people are doing as they start thinking about starting a business. In your experience, where do we land on this? Should we stick around for the big paycheck, the regular steady paycheck, or do we put it all on black and and roll the dice? The two words I hate whenever I ask a question, somebody is when they say the words, it depends. It always tells me that like, you're not going to actually give me an answer.
Now, I'm going to say it depends, but I'm going to explain what it depends on. It's more specific. Because I think when we think about this question, I think when either people are considering becoming a founder, what have you? Or I think when founders think about it, you know, in compare, in these little revisionist history, I say, what was worth it? I think what we're missing are a few really important criteria as to whether or not one is better than the other. Let's agree that,
yes, if you have a huge outcome as a founder, of course, it's better. Yeah. Of course, it's better. Just make sure you do that, right? And there's clear steps to make sure that you get a huge outcome, right? Yep. I actually think people are kind of thinking about the wrong way. I think they're kind of thinking about which one could have a bigger impact. What I think what they should be thinking about is which one could have a bigger downside, right? We really consider the opposite
because like anything else in life, if things go well, you don't have a problem. It's when things go bad. That's it. That actually matters. So let's talk about, we'll talk about three factors that people really need to be considering when they're saying, should I go for the steady paycheck or the risk at all. The first one, of course, we'll go through all of them is how older you, like what
stage of life are you in? Because like we're talking consequences. Dude, the consequence for a 22 year old college kid and the consequence for a 40 year old woman with four kids in a husband, right? Not the same. Nope. Not even close. Let's say it all, right? So age matters, right? The other would be how much you're earning, right? You know, what you're earning potential is. When I started my first company, my earning potential was literally $6 an hour. Anything would have put me in a
better spot. I was under the legal age of employment. So technically, my earning potential was zero at that point. I wasn't allowed to be paid. I had to pay myself. I talked to a friend of mine who actually has a seven figure salary. He's a sea level executive at a major hospital. And he was saying, hey, you know, I'm thinking about going off on my own, you know, do my own thing, but I'm risking a lot. I mean, later stage of my life would have you. And I'm like, are you out of your mind? Yeah.
So what he has to lose in that seven figure paycheck, right? And this is coming from two guys like us that are flounders through, right? But we also know the reality. Yeah. Yeah. Yeah. And then of course, the third part that we'll talk about is whether you even have the opportunity to exit at all. Like there's this given that just because you started to start up, that there could be an exponential outcome. It's like probably not. So we'll talk about that too.
Let's talk about age. When you think about the perfect age to start a startup, what are some of the conditions that come to mind? 20 years ago. It's like planning a tree, right? Because then I'll know how it worked out. That can give you a real answer. I love that. Yeah. You know, look, there is that there is that curve that you talked about. The older we get, the more complicated life becomes from a relationship standpoint, from a financial standpoint, we have less time to plan
for our retirement. If that's something that's important to us and for most people it is. So you have this, you know, in the same sense that money compounds over time. Unwinding failures is sort of the same thing, right? It takes time to undo those failures and kind of recover from major disaster. And so at least in theory, when we're younger, we have more time to unwind that. We have more energy. We have less, less cost. I mean, if you can still, you know, return to mom and
dad's home and sleep on the couch if things go poorly. Okay. That gives you a different ability to take risk. The one, the one wrench all throw into this argument is that as we age and as we, as we build things like some financial stability and we maybe have some money in the bank, maybe we own a home, maybe we have other assets. We also have a network, right? And that's not to be forgotten. So if we have to recover from something having a solid network, having people around you,
and then there's experience, right? Which is just to say that we may be better, not always, but we may be better at assessing what risk is tolerable and what risk is unnecessary to take. And so there is a little bit of a flattening of the risk curve in my mind, at least. I know now that there are decisions that I would make better having had the experience that I have. That said, I still think this definitely skews to being a younger founders game. And as far as just basically risk mitigation,
right? That's really what we're talking about, right? Like, can I afford to make up for a mistake? That's really what we're talking about. So when I talked about to older founders now, the founders let's say that are in their 40s, 50s and beyond. And they're thinking about starting something. They all say the same thing. What do I have to lose? Like literally, you know, the categorically, and the problem is some of those things that they stand to lose. They can't get back
time being the biggest, of course. But other things like if I'm in the later stages of my career, let's say 40s, 50s and beyond, I'm starting to think about retirement. I'm starting to think about I'm actively contemplating paying for tuition, let's say, you know, for my kids, etc. If I have them. And all of a sudden, I'm thinking to myself, I have shit to lose. That's the other side of it. Like, I worked really hard to get the stuff that I have. And if I lose it, I probably can't get
it back. If I lose my house, right? If I lose my 401k, if I, I probably can't, those things took were the way new of opportunity passes, right? You know, sorry, sweetheart, you're going to go to college and it'll be pretty cool at 20 and I promise. But daddy needs about 10 years to dig
himself out of the hole you just created, right? Not a very great conversation. Also, I would say for a lot of folks in my experience, when you're in your 30s, while that often sounds like an ideal time because you have the most experience and you have the most youth kind of at the same time. And I do think that that's a good era for folks to start. I also think it's when you're at your peak, brokenness because all of life's expenses have hit you at like full rate and you still often
haven't caught up to, you know, to having the income to cover, especially now. The second car, the second kid, the second mortgage, right? It's all there at that point. Everything, right? And in all the sudden, you're just getting into what will ideally be some of your peak hurting years. But you haven't had any before that. You know, I'm saving, you know, you don't have a lot of cash. So that's a hard time being your 30s. If you miss, if you trip to make up, so I've seen this.
I've seen I've got a lot of friends who have swung the bat in their 30s, burned that era and missed, right? And then had to make it up after that. The problem is when they're trying to make it up after that, you know, that usually have to go back to the working world, whatever it's what you have to do. When you're trying to make it up after that, your expenses just go up bananas, right? Just
orders of magnitude. It's crazy. Because like when I look at it, and I'm sure you just say, when I look at my costs of operation as a human, right, with just having a family of four of us, right? Compared to what they work 30 years ago, right? Not even remotely close. We spend more in a day than I did in a month. That's, that's, that's crazy. Yeah. And so I, you know, I think about it. And I'm like, damn, as we increase those age brackets by decade and with those the costs and
the consequences that come with those, it's not one for one anymore. Again, I agree with you. For sure, on the experience, no doubt, no doubt. That definitely helps. And when I look at the version of me now, verse the version of me 30 years ago, they're two different people, right? As far as capability 30 years ago, I was eating beef roney three times a day. Yeah. I had $16 in my checking. Rock bottom looked very different. Rock bottom was like, that looks soft enough to
sleep on. I'll be okay here, right? No longer the case. I needed hundreds of dollars to survive. And in fact, for some reason, this has always been burned in my brain. In my first year of operation in running company when I was 19, my cost of operations per month total cost all in was $550. My rent split with my roommate was $500. $250 a piece. And all of my operating expenses fit into $300 a month. Amazing, isn't it? Needless to say, I wasn't living bigger, gaining weight.
Correct. Yeah. We heard a dinner a couple nights ago. And a friend of ours said that they have a friend who's going to be moving to Antigua and they're currently looking for an apartment. Like something close to the center. And they're thinking like somewhere in like the $500 to $800 range. And suddenly as we could, my wife and I both gave each other what my daughter would refer to as bombastic side. We both this like, or I wish like $500 and about that sounds so, so fantastic.
Not that we would all even fit in that thing, but the idea is appealing. You know, back when I was that age though, because I was young and because my expenses were so low, I had a lot of people that would say to me, hey, that has to feel great because you feel invincible. Right? Because you're otherwise going to make $6 an hour somewhere, right? Like literally, nothing but upside. And I was like, you know, I don't feel that invincible. I have like 12 cans of
beefaroni. And when that runs out, I actually don't have food. Right? Like that, I get the idea, the concept that I'm young and I can rebound. I was in a unique position where if I didn't have anything to eat, I actually would not eat, but that was a whole other situation. Point is, like I was thinking about it from like, if this doesn't work, I am so screwed. I know we brought this up a couple of times on the podcast before, but you and I both built websites
back in the 90s for food. We literally worked for food, right? You got ribs and I got, I got, you know, I had like a $2,000 tab at the cafe that was behind my house. And so I ate their breakfast lunch and dinner for like two years because I could. It was fantastic. I used to do a thing in college where my open deal to everybody in the dorm was that I'll write whatever paper you have in 30 minutes or less for the cost of a pizza. There you go. And it was
funny, but that is I was a terrible student. So like I didn't say it would be a good paper. Said it would be done. Yeah, it would be a good paper, but it would have words. And I had so many, so many pizzas paid for it that way. But to me, it was worth it. People kind of have some revisionist history like, oh, you know, those guys are doing well. They must have always been rich. Nope. Nope. Not exactly. Not exactly. But anyway, you're going back to the age component.
I generally believe that while you don't have, let's call it replacement consequences, like oh, shit, if I lose, you know, I lose the house and I don't have a house, so I don't have anything to lose. You also don't have any backstop. Now what you said is, is accurate. You go back to sleeping at your parents place. Totally makes sense, right? Not the move you want, but it happens, right? But still you're restarting, right? In both cases, the difference is how
much should you lose when you restart it? As you get older, I've seen guys in their 50s bet more than they thought they would, which is always the case, lose it, and be like, what the hell do I do now? Like literally, how do I retire? Because even returning to the workforce at that, at that point becomes more difficult. Your past, your peak earning point in most cases, simply because in a lot of cases, because you left the market for a couple of years or 10 years,
or whatever to go do, what you're going to do. Yeah, it's tough. The analogy here, it's like you're kind of betting on a lottery ticket in terms of earning potential versus the low interest savings account. One has a really high return with an extremely low probability. The other one has a really low return, but with a guaranteed probability, right? You know what you're going to get, right? And so I think that's the big challenge in the trade-off here is when we look at those two
ends of the spectrum. And we'll talk about this in a minute when we get into exits, but as we look at that spectrum, the two extremes are quite extreme in terms of the outcomes you might expect. I think in one case, there's a high expectation. You can have high expectations around what you're going to get if you work the job, if you save the money, if you do all those things. The other one, you really can't have any expectations. When you start a plan, you kind of throw expectations to
the wind and say, here are some possible outcomes. These things might happen, and this is what I'm working towards. 100%. And I also think that there's a threshold. This next part we'll talk about at which point, how much you're currently earning has a very difficult replacement value. I think that there's kind of two schools of thought there. Let's say you're making $250,000 a year, which is a great salary by US standards, right? Even better salary for most countries abroad.
At that point, your cost basis for life, depending where you are, and you could be making it very young, could be older, it doesn't matter. Your cost basis often goes with it, right? Like at which point I'm making $250,000, I'm still not hanging out with my roommate in my college apartment, right? I've probably moved on about a house, whatever. So your costs are also high. Let's put that aside for a second. At that point, every year that goes by, if you risk it, you give up real money.
Like the kind of money that you could have paid for real things, you could have saved some of that money, et cetera. I would argue that as you start going far south of that number, let's say that you're at 75K, 80K, right? Because life's just fairly expensive, I don't think you were going to do
anything with that 80K that was going to make you any kind of money, right? Like I don't think the extra $800 you saved every month was going to get compounded it in some wild way, you know, unless you put it in a Bitcoin, which is a version of a lot of you take it. But what I'm saying is I think there's a threshold where like I said, if you're only making, I'm not knocking 80,000 dollars, if you're only making 80,000 dollars, probably worth it to risk it
because making 80,000 dollars was never going to take you anywhere. Whereas making 250, that's probably going to add up. For sure. You have to start to look at the compounding risk, but then the compounding benefit of having that compound interest in whatever we're going to. Also, at certain thresholds of income, there isn't even a whole lot of opportunity to compound it
because there is a base cost of living, right? And so if you do have, you know, if you're making 80, with the family of four, there's probably not a whole lot left over depending on what the lifestyle is to compound in the first place. So a little bit less risk in terms of what you're giving up does not change. And this is the thing I want to be really, really clear on. Does not change the risk profile of the actual startup in the least. I might make it even worse because you've got
less cushion. You've got less to fall back on and you'll have to work even longer to make that up. So it doesn't really change the, it might change your perception of what you're giving up, but it does not change the actual probabilities of success with the startup achieving any kind of outcome. Right. Right. Right. Also, I kind of have a feeling that a lot of people are like, well, I could have been making this much money in the market, right? The forever fantasy, right? It was like,
yeah, I'll go to this startup and only make 100K. But if I wasn't working here, I could have made 300K working somewhere else. Yeah. Yeah. I could have given that $100 that grandma gave me for my fifth birthday into Microsoft stock in 1983. And yeah, be sweet, but I didn't. Here's kind of what that fantasy argument looks like in my mind. There is this other job that pays extraordinarily well. That's also awesome, which to me is hilarious, right? Dude, if there's a job that pays you three
times as much and is also awesome, why aren't you there? Do that. Yeah. Do that. It would be totally fulfilling and stimulating me and all the ways and to be stimulated and create the type of growth and leave the legacy I want to leave. Then do that, right? If that is available to you, take that now fast. Right. I would argue that sort of is available. Yeah. The only cost is your soul. Yeah. Sometimes. Well, not just like historically from when I saw young professionals, right? They were
like, Hey, I can get a job at Accenture. It's usually consulting, by the way, like consulting is kind of that alternate universe. And I'm like, yep, you probably could make more money doing that at the expense of your soul. And look, I was in consulting. So were you by virtue of being in the agency business for a decade, right? The only reason I know this, I've lived at firsthand, it is soul sucking is hell. Some people who works out great. I mean, I was the CEO and founder of
the company. It was soul sucking for me. It's so imaginative. I felt that way the other. When I watched people go to the big consulting firms, like the Accenture is the world, etc., their lives were like taken from them. Again, I'm not knocking Accenture. It's an incredible company. What I'm saying is, yes, you can make more, but at what cost? At what cost? That's same. That's exactly it. It's the same people want to go and invest in banking, you know, things
like that one work wall street. Yes, you can make more, but at what cost? My point here is, we all kind of create this fantasy that had I gone the paycheck route I would have made exponentially more. And I'm like, you sure? Do you know that for sure? Here's the irony of that entire conversation. Because that same person back when it was time to make the decision between job and startup, clearly was like, I'm going to make way more money with the startup thing. This is going to be the
thing that makes it all. Why would I take this stupid job at Accenture when I can go and make 10 times more at my startup and a drum app? Right? It's always hysterical to have. Any type of revisionist history is hysterical. And I get why we do it. We don't want to feel completely foolhardy, but you have to want to accept a little bit of that. I think that's part of how I've become so much more comfortable with startups as I've gotten older. I'm totally cool making
mistakes at this point. I don't care. Yeah, I fucked up. I do it all the time. It's okay. I've gotten used to it. Right? You know, something that's really funny about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done a thousand times before you, which means the answer already exists. You may just not know it, but that's okay. That's kind of what we're here to do. We talk about this stuff on the show, but we actually
solve these problems all day long at groups.startups.com. So if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with it. When we look at what we're for going, I just think that like, you know, hey, I was for going that big salary. I would have otherwise made whatever. And I'm like, wouldn't you have really? Because maybe probably not, right? Here's what you never hear people say even though it's the truth.
Had I not to the start of thing, I would have gone to a job that I don't really like out of gotten maybe 8% raises and gotten fired in two years. You never hear anybody say that, right? It's always the I could have been VP or whatever, you know, sea level executives. Like, really? You sure? This is exactly the kind of, you know, pay those that get into trouble around startups in general, which is that we just assume that whatever the best outcome possible is going to be,
that's the one we'll hit, right? So when I'm thinking about my startup, it's IPO, it's ring in the bell at the Nasdaq. It's, you know, sailing around in my yacht afterwards. And if I took the job, it was, you know, clearly I would, you know, I would start wherever I'd start. And then within a year, I'm the CEO. And then I'm actually just a finger-tenting board chairman who makes millions of dollars
of your doing nothing, right? Of course, right? Whenever I think about like the, the opportunities of anything that I've worked on over the years, I've always applied kind of three different filters. The first filter I applied is if everything goes to hell, how much downside can I tolerate? Right? By the way, that's the most important one because everything else, if it goes positive, who cares? There's a million ways to manage positive. Yeah, we'll figure that out. Good problem.
Yeah, yeah. Ryan, when you and I've done acquisitions of companies, we say the same thing every time. We said, if it goes well, it goes well. It's not hard to figure out. If it doesn't, if this thing becomes a complete disaster, what can we absorb? And that was always primary concern because that's an existential concern. The second one was if it's a base hit, what's a base hit even look like? In other words, if we kind of fire sail it or we kind of just, you know, like it never became what
we thought would become, but we get something out of it. What does that look like? And is that even worthwhile? The third one, of course, is what's how big could it possibly be? And I like at that going sort of who cares? Right? Like if it winds up being that, I don't know how much decision criteria to work on. But well, do you think it's worth 175 million or 185 million? Who gives a shit? Right? When that happens, I'll worry about it. When I look at these decisions,
it's like, you know, go steady paycheck or go for the big swing. I think in terms of downside. Right? Now, I know I'm not supposed to. I'm you and I are founder guy, right? We're talking about now, start up to the best everything. Not necessarily. No, it's not. No, no, no. We've shared the honest side of this more than once in this podcast. Right. And that's sort of the point of our podcast is kind of giving people the true breath of things for an awful lot of people. The study
paycheck actually makes a lot of sense. Right? Again, it's given their life stage or the life conditions, their otherwise consequences, their earning potential elsewhere, etc. In other words, if you've gotten your law degree, your medical degree, whatever, right? And you don't take full advantage of that. And you may hate those jobs. And I've got plenty of friends who've just said, actually, it's only got to feel totally get that they don't do it. But there's a real cost,
you know, financially to not exercising that capability, right? So that's a concern. The third one, though, totally separate from your age or earning potential would be whether or not you can exit it all. Yeah. It's not a foregone conclusion that you will. In fact, it's a probability that you won't. Right. We ran the numbers. They just looked this up because I was curious kind of how 2023 ended. And this is January of 2024 when we're recording this in 2023. 108 companies went public.
And I was like, damn, that's not a lot until I then asked Dr. Chat GPT. How many of the public in 2022 Dr. Chat GPT told me 71 71. Yeah. That's a big increase year over year. Unless you look at the absolute number. I'm not saying you've got to go public in order to be successful by any means. And if you've ever listened to this podcast, you'll know we're saying the exact opposite. I'm saying
that's the best possible scenario for most companies. And what was the analogy that the statistics you would say of the probability of me getting into an IPO compared to, I think you said the NBA. Yeah. I was saying like, how many people bounce a basketball versus how many people get into league every year? You actually have a better chance of making it into the NBA than you do having an IPO, right? And yet we would all look at that and go, I don't have any chance at that.
Like, of course, right. And again, it's not to knock people's hopes and dreams. We're just making it numeric. We're saying like, look, regardless of how you feel, the numbers are what they are. And again, that is typically the biggest possible outcome. Not necessarily one that you need. However, as we start loading up more and more, particularly when we're raising money, etc. And we're essentially narrowing our number of options, you know, at which point we've raised
$50 million. We have a very narrow number of options in order to get that money out. Yeah, you're basically IPO acquisition or nothing, right? Those are your two options at that point. Correct. When folks are saying, Hey, is it better to risk it all for the big outcome or get a steady paycheck? One of the first things I'll ask is, what do you picture the big outcome to be? Because if you're trying to make $100 million, like air go like a massive sale, etc.
I don't know, man. That window is real small, like really, really tiny, freakishly small. And it's like, no one really wants to talk about it, right? Here's what I mean. Everyone wants to talk about the big outcomes. No one wants to talk about the probability that you'll get there. Oh, you start up guys, you all make money. I'm like, ah, you think that you haven't been in this business, right? Yeah. We make lots of it. We make lots of it. Most of us also tend to give more
of it away than we make. That's the. Yeah. Yeah. Yeah. Yeah. Yeah. I think if you were to say, here's a different point. Right. If you and I are starting a new business today, and we're going to say, look, man, the goal is to get this business to 1.5 million revenue and 500K and net income that will split and we'll both make 250K a year. That's our version of risking it all and getting the big paycheck. I'd say pretty high probability that's going to get done, right? You guys have
done this for a long time. You know, you're you're kind of prime of your careers. Yeah. Like pretty nothing. Nothing's a given. It could be a total turn, but it seems pretty reasonable. Yeah. The probability of that versus the probability of us starting the same business and setting a goal of IPO is exponentially different. Right. We we have a strong likelihood that we can accomplish one and there is anybody's guess as to whether we can accomplish the other. So imagine this kind of
slider, if you will, right? And one end of the slider is any income we make is a victory to us. Right. The payoff is there a lot of times you see it in side hustle, right? It seems like, look up right. And I just just start something and a startup weekend style environment, right? And we're going to go launch this thing. And if it makes an extra $3,000 a month into first some of our mortgages, awesome. Right. Wonderful. That's one end of the slider, right? Kind of anything is
is a success. The other end, of course, is a billion dollars or bust, right? And as you move down that slider, your probability limits geometrically, right? Here's another way to look at it. Before that slider even starts grading, right? Before that slider even starts registering it, the slider goes on for miles where you never even get to any success at all. So it doesn't start at success.
You need a 36 kilometer wide monitor to scroll. Exactly. Exactly. And so when we talk about, is it better to take the paycheck or to swing it for the fences, I would say where the fences look like, right? And how did you define them? This is always one of those things. I know you get this you get this conversation a lot as well, which is, you know, people are saying, you know, this needs to be this. It needs to be, you know, a $200 million business or a $500 million
business or a $1 billion business, you know, we got to be a unicorn. Why, right? Have you actually sat down and thought about what changes at that level? Because I can tell you a hell of a lot changes between $1 and $200 million. And there's a whole lot of happy exits along that path that
were well before that mark. And so often founders have not really done any of the math. You know, we've suggested this to thousands of people this point, which like sit down, spread sheet out, what would actually happen and think about what do you actually need to achieve the light that you want to have? And now sometimes that's not the only thing that's driving it, right? There are very many times like for us, we're trying to drive impact. Yes, we're also trying to make money,
but we're trying to drive impact. We want to impact as many founders as we can. And so that's part of the bar that we're setting as well. And so like I get this question a lot at dinners, I'm sure you do as well. It's like, right, you're an entrepreneur. What's the best way to make money? It hands down. I always have the same answer. Get a job. You want to make money? You want to guarantee you're going to go get a job. Get a job. If you don't have a job, go get a job. You'll make money.
It's cool. If you want to make an impact, then also maybe get a job. But you can certainly have a great shot at making an impact through a startup. And I think that's that's one of the big, less objective trade-offs that we make in this calculus. I'm at a life stage now. This year, I will hit the ripe old age of 50, which is hard for me to even say, but it's true. Right behind you. That's why I don't like that. Let me know if I should keep coming or if I
should turn back. Turn around now. But here's what's interesting about that. I'm now of an age where all of my friends, lots of friends across a lot of different aspects of life, etc, have all kind of culminated to more or less become what they're going to become. I'm professional. I'm not talking about it as humans. Right? Up professionally. And so what you've seen are you see, saw the folks that went to med school or law school, right? And kind of took that path.
You see the folks that did the startup thing. You see the folks that went in, took a job as a teller at a bank and kind of moved up the banking ranks, etc. And you've kind of had an opportunity to see where they all crest out. Right? Now, this is an interesting spot because every reason they're their late 40s, early 50s, and they're all kind of thinking about retirement. But they're also all at their prime peak earning years of their life. Right? In other words,
it doesn't get better for most of them after this. My point being, there's a fair amount of that did the risk thing. There's a fair amount of them that did the steady paycheck thing. Here's what I've found for the folks that had strong income early on. And I'll give you some examples. I've had some friends that were just good salespeople, right? They're just good, solid salespeople. And because of that, they were able to kind of get their income over like the
200 K mark early in their careers, like late 20s, early 30s. So that compounding started quick. Boom. And hold it there, right? They didn't do anything beyond that. They didn't start something. They didn't bet something that whatever. 250 from 24 until 50, right? That's a lot of 250s. The reason it adds up, and then you know, this I'm not trying to get all like Kiyosaki year, but like the reason this adds up is because for most of us, depending on your life, you have a couple big
financial blocks that you have to get past. But after that, you're kind of in decent shape, right? So one of my friends, actually guy, you and I both know, it's just been sales guy forever, right? And it's just constantly sold, constantly sold, right? And just hustles year after year. Always make sure he hits his number, et cetera. But a nice house, mostly paid it off, right? bought cars that he could pay for in cash, right? And now has a ton of cash, right?
He didn't do anything special, right? I'm not knocking his work form. It's actually amazing. I'm saying he didn't take some crazy chance. Yeah, didn't play probabilities. Yeah. He just stacked, right? So he's doing really well. And I'm sure you've got friends like this. And I've got friends that every decade had some scheme where they were trying to like, you know, make up for what they didn't do in the last decade. And they're broke, right?
Yeah. They just keep taking the big swing because at some point it feels like it's the only way it had begun to believe that like, look, I'm too far down the curve. I can't compound it. I don't have enough time to compound. So I just have to keep betting. I have to scrape together what I can and bet it all, bet it all and bet it all. Yeah. And it's tough to watch. So basically got three groups of friends at this point. I've got friends that did risk at all,
like true entrepreneurs nail on the head and just crushed it, right? Have just gangster money. I'm done incredibly well. I can count them on two hands. It ain't tons of people. It's probably more than that, but not a lot, right? It's way less than people think. And I hang out with all founders. So it's not like I only know a few founders, right? The second group are people that just just kept grinding year after year. They just kept,
you know, maxing out that comp every year and have done really well. I mean, they paid for it. Right? I mean, they they hustle, right? Not that anybody that's made money hasn't paid for, but these guys you don't really paid for it. And they've done well. And I've argued kind of in some cases, as well as the guys who had an exit, right? Which is really interesting to me. And the third group would be folks that kind of just never ended up doing anything. They never risks
nor did they ever max comp. Yeah. And they're just forever on the treadmill. Just coasted, but yeah, but they have to keep, they have to keep paddling to keep it up, right? And they're pissed in it rightfully. So because they realize that no matter how much they do at this point, they're not going to change the outcome. And so I think when you're contemplating the two sides of this, do I risk it? Do I stick with a steady paycheck? What I'm explaining by showing
you those three buckets is they've actually seen both work. You can find an example of success anywhere. You can find example of failure anywhere. I think it's really important to understand that there's a spectrum of success and failure that exists regardless of which choice you take. I think the real decision points come down to, unfortunately, this is why the it depends. Come down to some of the
more subjective stuff, right? The objectively, if what you want is to know in 20 years that you will have $1.5 million in the bank and you want to know that, then it's figure out your comp, max it to the extent that you can control your costs such that there's a guaranteed outcome there. And you can kind of do that, right? If that's not what matters in life. And if you want to have an impact, if you want to enjoy the journey, then maybe it starts right at you. But again, even that's
not guaranteed. We know to your point, we know plenty of founders who have had those big exits and still aren't happy people, right? They're not satisfied what they've got. The idea of tying it all to this big outcome at the end because then it's Shangri-La. Unfortunately, a lot of people get there and it's the same shit show it was before they had it. Just like they're just not happy with
what they're doing. And so I think that if you're going to optimize for anything, optimize for the life that it gives you while you're doing it, not for something at the very end of the tunnel because tunnels take a lot of curves. Sometimes they collapse. They do. Look, I would say is if I am sub 40 years old, I have probably a pretty good opportunity to take this risk because I've still got enough years in front of me to do something
about it. If you're sub 40 years old, then you've got a fully gassed up delorean somewhere that I need to know about. That sounds wonderful actually. And then the second would be, look, if I'm otherwise making 80, 100,000 dollars, which isn't bad money by the way. No, no, no. I'm just saying, but if it's not the kind of money that I'm really not going to get rich, I could live comfortably,
but I'm never going to really earn true wealth where my money is making me money. Then it's probably worth the risk because otherwise you're going to kind of still be in that holding pattern financially for a very long time. And it's worth trying to get out of it if not once. The last would be, if you change what your goals are, if you change what your goals are, right? And you say, hey, this thing has to make 100 million dollars or bust. I think it's the dumbest goal ever.
And I get why people do it. It sounds awesome. It sounds awesome. If it weren't for the fact that 99.9 percent of the time I see people miss, right? I would embrace that goal, Gary Vee style all the way, right? Except I'm like, you know what? How about we find the first find a goal that you'll actually hit. So make sure you're okay in the get chat for space. And then worry about getting you home, right? So just swinging for the fences and everything. The massive flaw in all that. And like,
I, you know, nothing wrong with having some goals, but I, there was a quote from James Clear. And I believe it was in atomic habits that he said it, which is that we don't rise to the level of our goals. We fall to the level of our systems. So it's cool that you say you want it, you know, 100 million dollars. Cool. That's a great goal. How the hell do you get there? What are the things that you're
going to do? What are the systems? What is the evidence that you have some plan for actually achieving that goal? And I think this is where it gets, it just goes off the rails really quick because people sit down, they do the business plan, they do the five year projections. And of course, it's somewhere over a billion dollars magically every time. Yeah, except that when we look at startups five years later, almost none of them have hit that. It's so bizarre to me. Well, that no one hits those
goals. You don't say, yeah. I get it. I get it. So here's what I'd say. For most folks, the study paycheck works fine. Right. And I respect the study paycheck, even though we pedal startups for a living, so to speak, I respect this, the study paycheck. And I know you do too, right? There's a time and a place to make that risk. It's usually less than what people think it is. And it usually makes more sense to apply that risk. If you've got a threshold, like you just mentioned
that you can actually cross that gets you somewhere, right? This amorphous goal of it's got to be a billion dollars or whatever, just kind of generally doesn't make sense. There's a 99.9% chance that it's not going to work. So what we say is when we're optimizing, we look for the right criteria to make the right decision. If they line up and you can come back from that, yeah, take the risk. Otherwise, stick with your job because your job actually may pay even better.
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