Daniel Vassallo

Daniel Vassallo quotes on risk

Building a portfolio of small bets. Quarter-time with Gumroad. Building userbase.com. Creator on dvassallo.gumroad.com. Ask me anything at daniel@hey.com.

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A barbell strategy for working on your own things: 1. Find a low-stress gig that pays the bills and leaves you with some spare time & energy. 2. Use your spare time & energy to do whatever you want, w/o being beholden to anyone and w/o risking anything consequential.


Thinking about working for yourself? Forget about failing fast. Go for the low hanging fruit first. Then take more aggressive risks once your independence is sustainable. Why? Because this approach almost never fails.


Product first: You start with an idea & try to make it a reality at all costs. Business first: You start with a business strategy & try to maximize profit via prudent risks. Lifestyle first: You start with a preferred lifestyle & try to find business activities that enhance it.


The biggest risk of a career as a corporate employee isn’t getting fired (most people can find another job quickly). It’s the risk of becoming unemployable if your boss becomes unwilling to give you a good reference. Your career becomes dependent on the opinion of one person.


Avoiding risk of ruin is not enough. You also need to avoid spending time on things with low chance of success. You need to make sure you see multiple payoffs in your lifetime, so you can’t keep trying things with 1 in 1000 odds. The upside won’t matter. You’ll run out of time.


If you like the self-employed lifestyle, and you'd rather not go back to full-time employment, you need extreme risk aversion, not extreme risk taking. You're not trying to maximize profits. You want to avoid having this lifestyle taken away from you.


Some people like to imagine themselves taking a huge risk and emerging triumphant against all odds. I prefer discovering non-obvious easy wins, where the odds are stacked in my favor, and the risk is not consequential.


If you like your independent lifestyle, you need extreme risk aversion first, not extreme risk taking. You're not trying to maximize profits. You want to avoid having this lifestyle taken away from you.


I get smarter when I’m exposed to the consequences of my mistakes, and chances are, so do you. My brain seems to activate a dormant part of itself when there’s risk on the line. And the lessons learned under the influence of risk seem to stick forever. Risk taking is a muscle.


If you want to take a risk, first figure out how you’d recover from the worst-case outcome.


Take risks without putting yourself at risk.


You don't overcome the fear of failure by suppressing fear, but by figuring out how to make failure not consequential. Our subconscious provides checks and balances on our ambitions, and protects us from taking imprudent risks. Ignoring it would be quite foolish.


To reduce the risk of failure you have to understand who you really are (versus who you wish you are). Your preferences, not the preferences of others. Your strengths, not those you wish you had. Things become a lot easier once you're genuinely real with yourself.


Judge your decisions not by what actually happened, but by everything that could have happened. Outcomes are a poor measure of success. An imprudent risk that happened to pay off is not success. A sustainable process that will almost certainly pay off, is.


To take risks, you must become a prepper. First you protect yourself from the worst case scenario — whether it’s a recession, getting fired, business failure, etc. Then you become free to take speculative risks, knowing that whatever happens, the worst case cannot harm you.


Becoming self-employed is easy. Staying so is hard. Once you become exposed to the risk of failing to make it sustainable, you change. You become more risk averse, because you wouldn't want this lifestyle to be taken away from you.


Starting a business because of an all-burning passion for the domain is like getting high on your own supply. It will likely cloud your judgment, and lead you to imprudent risks. You need to enjoy doing the work, but you probably shouldn't pursue it with desperation.


If you squeeze all uncertainty out of life, you also remove all the upside. The highly predictable life track can at best go according to plan, and at worst unravel because of hidden risk. But add a bit of unpredictability, and things can go better than you expected (upside).


An investment risk that's rarely considered is that you never know when you'd need the money. There's always a loss of optionality. Sure, you invest with a 20yr horizon, but an opportunity comes up next year, and now your money is tied up or the market is down 40%.


My barbell attitude to risk taking: On one hand, extreme risk aversion with things that can jeopardize my ability to stay self-employed. On the other hand, highly speculative bets with my business, which expose me to unlimited upside. No middle.

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