Mark Andreessen may have lost all of his hair and reminds me on occasion of the coneheads. However, while he runs around Silicon Valley making billions with a16z he has found time over the years to write some shockingly good and really impactful articles.
The PMARCA Guide to Career Planning is one such excellent read. I ran across it sometime ago back but thanks to Twitter and one @ZafirKhan I was reminded of it again today. Instantly I recognized how relevant this advice still remains. It presents a remarkable if maybe not so novel idea of thinking of career development in the way that fund managers go about building an investment portfolio. In this analogy every opportunity, be it working on that special project or quiting and joining the start-up firm, is judged not only in terms of its risks versus reward ratio and opportunity costs but most importantly by its overall contribution to the make up of the package. No single opportunity is evaluated in isolation instead they are ranked based on how they will affect the overall portfolio.
Look at your career as a portfolio of jobs/roles/opportunities. Each job that you take, each role that you choose to fill, each opportunity you pursue, will have a certain potential return -- the benefits you can get from taking it, whether those benefits come in the form of income, skill development, experience, geographic location, or something else. Each job will also have a certain risk profile -- the things that could go wrong, from getting fired for not being able to handle the job's demands, to having to move somewhere you don't want to, to the company going bankrupt, to the opportunity cost of not pursuing some other attractive opportunity.
Once you start thinking this way, you can think strategically about your career over its likely 50+ year timespan.
You want a mix of High Risks and High Rewards in your package balanced out by taking some low return low risk possibilities. This portfolio strategy can lead one to take on risks that would rightfully otherwise appear unwise and less attractive when viewed as standalone propositions. Interestingly though, when paired with the melons pursuing these riskier options turns out to be a winning strategy.
In life, there is generally no opportunity without risk. Doing the legwork on that extra project for the senior person at your firm? You risk exhausting yourself and doing your day job poorly. Joining your former manager at that hot growth company? Maybe it tanks six months later and then your current employer won't rehire you. Join those smart friends at Denny's and start a new company with them? Maybe it completely fails, and you have to explain why you were so foolish at every job interview you do for the rest of your life. There are always real and legitimate reasons why people often pass on opportunities -- they see the risks and they wish to avoid them.
The issue is that without taking risk, you can't exploit any opportunities. You can live a quiet and reasonably happy life, but you are unlikely to create something new, and you are unlikely to make your mark on the world.
Another key element is also about timing and how at different points of the journey the composition of the portfolio should change.
- When you are just out of school -- and assuming that you are relatively free to move and have a low burn rate -- is when you should optimize for the rate at which you can develop skills and acquire experiences that will serve you well later. You should specifically take income risk in order to do that. Always take the job that will best develop your skills and give you valuable experiences, regardless of its salary. This is not the time in your career to play it safe.
- When you have family obligations -- a spouse, two and a half kids, a dog, and a picket fence -- that's obviously the time to crank back on the income risk and instead take a little risk that you might not learn as much or advance as quickly or join that hot new startup. However, even this is not black and white! In Silicon Valley, for example, it can still make a lot of sense for a young parent to take a risk on a hot new startup because it will usually be easy to get another job if the startup fails -- especially if one has developed more useful skills and experiences along the way.
- There may be times when you realize that you are dissatisfied with your field -- you are working in enterprise software, for example, but you'd really rather be working on green tech or in a consumer Internet company. Jumping from one field into another is always risky because your specific skills and contacts are in your old field, so you'll have less certainty of success in the new field. This is almost always a risk worth taking -- standing pat and being unhappy about it has risks of its own, particularly to your happiness. And it is awfully hard to be highly successful in a job or field in which one is unhappy.
- Likewise with geography risk. You start out in one city -- say, working at a software company in Philadelphia -- and you're doing well. You get the opportunity to jump to a faster growing software company in Silicon Valley. Should you take the risk of moving geographies -- to a place where you don't know anybody, and where the cost of living is higher? Almost certainly -- the additional risks of not having an extensive personal network and of tolerating a lower standard of living for some period of time are almost certainly overcome by the upside of being at a better company, relocating yourself to the heart of your industry, and setting yourself up to exploit many more great opportunities over the next decades.
- Working for a big company is, I believe, much risker than it looks. I'll talk about this more in the next post, but people who work at big companies are subject to impersonal layoffs at any time, and often forego the opportunity to develop skills and gain experiences as rapidly as they would at someplace smaller and faster growing. And then five or ten years pass, and you realize your skills and experiences are only relevant for jobs at other big companies -- and then you have a real problem.
- Finally, pay attention to opportunity cost at all times. Doing one thing means not doing other things. This is a form of risk that is very easy to ignore, to your detriment.
I don't always agree with everything the Andreessen Horowitz bunch echo. For example, I think their firm belief that only Red Hat can make it to a billion by selling open source software is plain wrong. Nevertheless and irrespective of his motives, Andreessen has encapsulated some solid tips in this series and gifted the world with more than Netscape, Mozilla and Firefox.
There are too many quotes and excellent snippets for me to do it justice in this short summary. Read the full episode and just remember instead of trying to plan your career make your emphasis be the development of skills and the pursuit of opportunities.
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