The Barbell Strategy for safe risky bets
So there you are, sitting at the kitchen table, looking at the pile of bills. You quit your job n months ago with n months of savings in the bank.
You worked hard. Super hard. You studied up on all the latest techniques. You did everything you possibly could to make freelancing work and find clients and get paid. But for whatever reason it wasn't enough.
Now there isn't enough money to pay next month's rent!
You thought that taking the leap and diving head first into freelancing would light the proverbial fire under your butt and you'd rely on that to kick things into high gear, but even with all this effort all it's done has stressed you the heck out.
The problem is that you've gone all in.
So it's understandable that you may have some anxiety around this idea of working for yourself. What happens indeed if the no-money-for-rent-situation above becomes your reality?
You can avoid the pain and suffering by easing into freelance slowly and finding your first gig while still in a position of stability.
In the book Antifragile, author Nassim Taleb introduces the idea of a barbell strategy for risk taking. In the same way that a barbell is heavy on both extreme ends, you can eliminate your risk of ruin but maintain the ability to grow by mixing very safe bets with very risky bets.
If you only take the safest path through your career, you'll never advance.
But if you only take big risks, you'll probably fail hard.
Mixing safe bets with risky bets lets you keep taking those risky bets without much downside. Success becomes an inevitability if you can keep trying. For example:
Your full time job is a safe bet. You'll most likely make money from it this month. Freelancing is a risky bet (at first). You may or may not make money from it your first month trying. So don't quit your job just yet! Consider trying to reduce your job hours, working fewer days, or work an hour every morning and three on Saturday. Then you can try freelancing until it works, and then quit.
As a student, not dropping out and staying in school is a safe bet. You will probably make it through the semester since you have reliable shelter in the dorms and food at the dining call. Freelancing is uncertain to make money (at first), but if it doesn't then for you it doesn't matter much at all. This is how I got my start, and I was able to make all of my mistakes in a sandbox with zero danger before graduating.
We can also apply this idea in many other business situations. After you've mastered freelancing, if you keep some stable clients, you can try out new riskier and unproven ideas without staking your wellbeing on them either.
Maybe you have goals of building an app business. As I learned myself the hard way, making a living on apps is hard. Way harder than I realized. There's an often cited article called Navigating the long, slow SaaS ramp of death put out by Josh Pigford of Baremetrics. It may take a long time to be sustainable.
If I wanted to start an app business now, I'd keep some clients and work 20 hours a week on the app and 20 hours a week on freelance. Freelancing used to be a risky bet for me, but now it isn't. What is risky and what isn't shifts as you advance in your career and get more skilled.
Historically my freelancing was only writing code, but I've recently tried adding code reviews as a service to my offerings with little fanfare. I have a single client buying that service and it's great. I can grow that service as slowly as it needs to without really any risk at all.
I used this strategy to start this mailing list. I can put real effort into writing these emails to you, which may eventually make money somehow but they don't have to immediately. I can stay true to my goal of helping people quit jobs they hate without having to compromise quality just because money has to be made right now.
But you may say, "David, if there is no proverbial fire lit under my butt, I'll have no motivation to do anything! I thrive under pressure."
I'd argue that working for yourself inherently requires an ability to do important but not urgent things. Full time jobs often don't require nearly as much self-direction because someone is sitting on you at all times (like, a manager or boss) and if you don't do your work you just get fired.
It's very possible in freelancing (especially part time freelancing!) to procrastinate far beyond what you could at a job. Ask me how I know.
If you are to succeed in freelancing you'll need to operate as both the employee and the manager at the same time. This is a skill many people don't have inherently and have to develop. So try it out beforehand before you quit your job and make sure you can find a way to make it work.
I first sent this article as a letter to my mailing list. New letters go out each week!
Learn freelancing from someone who's gone down this path before. In the the Less Boring Letters, I'll teach you everything I know about ditching the 9-to-5. Build a profitable new business that you love, benefitting from all of my trial and error.
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