Why you should always take the easy route
Risk-averse thinking for smart risk-taking
Working hard pays off. But it leads to silly ways of thinking that have become far too popular. Specifically, it leads to people choosing the hardest routes in their lives, losing sight on what truly matters: achieving what you want.
In this post, I want to pay homage to what I think should be your focus: optimizing for winning, not suffering, and choosing to play the odds in your favour.
Upsides vs downsides
All choices we make in life have upsides and downsides. Most of the decisions we make in daily life have low stakes: choosing what clothes to wear, having a walk by the beach or in the countryside, cooking at home or ordering takeout, etc.
Both the upside and the downsides of these choices are limited and non consequential. This is why their stakes are low.
Opposite to them, high stakes decisions are those with both a huge upside and a huge downside. These are actions such as starting a business or not, choosing to invest in crypto, working at a startup, etc.
Both of these types of decisions are important for your life. And in both you should go for the highest odds in your favour.
Low stakes actions compound over time. Choosing between ordering fast food and cooking a nutritious meal at home has low stakes when looked at once. But compounded and done every day, it makes a big difference in your overall health.
If your goal is to be healthy, choosing to cook a nutritious meal balances the odds in your favour by a large margin. It is dumb to choose ordering fast food over it. Why would you ever choose the harder path here?
Now, let's look at higher stakes actions like starting a business or not.
Behind every business, there is a person who has goals and dreams. Starting a business serves a purpose like reaching financial independence, becoming more independent, putting oneself to test, etc.
The purpose behind the action is important, because depending on how true or important this purpose is to you, the action itself is a hard or an easy one to take.
Say your goal is to become a millionaire. You read and investigate and come to terms with the idea that you can’t save your way to millions if you make $50K per year. So you see that the usual ways people become millionaires is by inheritance, investing and business.
You can’t choose your parents and you don’t have money to invest, so your vehicle of choice for becoming a millionaire is business.
Looks like the easiest route, right? Not necessarily.
Depending on your time frame, risk tolerance, current experience and skills, knowledge, etc. you might be making the hardest decision.
Lets look at two scenarios:
Choosing which startup you want to work in
Choosing between starting a business or working a 9-5 with a side hustle
Easy route in startups
Say you don’t want to start a business. But because you’ve read about how ownership is a sure way to become a millionaire, you want to join a startup and get equity. It makes sense to you and your goals, because you can learn a lot, hone your skills and gain equity on something where the founder takes most of the risk.
Imagine you have the option of owning 25% of a startup pre product market fit (PMF), and the option of owning 0.25% of a startup that has found PMF. A difference in ownership that is orders of magnitude.
For the sake of simplicity, let's imagine startup A is valued at $100K, while startup B is valued at $10M. In both you own $25K, and to become a millionaire you need a 40x.
You might consider that option A is a better one, because a 40x increase in a $100K startup is “only” $4M. Whereas a 40x increase in a $10M startup is $400M.
In almost all scenarios you can make up in your mind, choosing startup B is a better and easier option.
“Bro you don’t get it, if I own 25% of a billion dollar business, I’m worth $250M. If I own 0.25% of a billion dollar business, I only own $2.5M.”
Yes, $250M is more than $2.5M. But wasn’t your goal to be a millionaire? Option B has higher odds of doing a 40x quicker than option A.
Startup A might never reach PMF. It might take 10 years for it to reach PMF and you might jump ship after 5 years of your partner out-earning you while working less hours. The startup might not make it because you run out of cash.
And a million different scenarios that leaves you with nothing.
But you read on how difficult it is to reach the 1B valuation mark, so you might think startup B has already grown everything it had to grow. You might be right. But the startup is giving you equity after it’s achieved the hardest thing: achieve PMF.
It is easier to win if you pick the winning horse when most don’t know it’s a winning horse. You don’t want to be picking fouls who can’t even race yet in hopes of being the first one to spot the talent.
Easy route in business vs 9-5
Say you do want to start a business. You do it not only because you want to become wealthy, but because it is important for you to gain independence from any job. The easy route here depends on your situation.
If you’re in your 20s, without capital, connections or experience, it is going to be way harder than if you were in your 40s, with capital, connections and experience. There is a reason why the average age for starting your first business is in your 40s, after all.
Now, you might think that with online business, this learning curve has shortened and that there are business models you can build that need less capital, connections and experience. And you are probably right.
Still, the odds are easier for you the more capital, connections and experience you have. If we’re making decisions now based on odds, averages are our friends. And here is where I think many optimize for the hardest route, rather than the one with the highest odds at winning.
If your goal is to become wealthy and independent, you need to make it very clear what number you want to achieve and how exactly you measure your independence.
There is a massive difference between wanting to be financially comfortable enough to weather any storms… and wanting to own a $50M business. If you want the former, it’s dumb to play the game that might lead to the latter.
When people discuss independence from the 9-5 or from a job, it often seems like they don’t truly know what that independence looks like. To me personally, independence is gained by being very good at a valuable skill that pays well.
I want to be independent, my skill of choice that I’m honing is sales. I’m a simple man who likes to think in simple terms: if I become very good at selling, I will never be out of work and money to put food on the table. I could work at any company. I could build my own company. I could freelance.
Because I personally do want to become independent from any job, and think that the best way to do so is by becoming very good at one skill, I am optimizing for that skill by working for someone else.
The decision is easy for me. I don’t want to start a business to learn to sell, because I would have to wear many hats and get very good at many things. I want to have the highest odds at getting good at one thing only, and I do so by removing myself from having to get good at the rest.
“Bro if you work for someone else, that goes against being independent”. Sure, but I have patience. I don’t mind not being fully independent now, if I know I have the highest odds at being independent in the future.
Again, this is my personal choice, but I share because I am optimizing for the highest odds within the parameters I want to play with. I make decisions that make sense to me.
If you’re someone in your 20s and your goal is to become wealthy and independent, maybe starting a business isn’t the best choice for you. Maybe the odds are stacked against you, and there are easier routes like working a 9-5, honing your skills and building a side-hustle in the meantime.
If you’re someone in your 40s and your goal is to become wealthy and independent, maybe starting a business is the best choice for you. You might have already laid the necessary groundwork in terms of skills, capital, network, etc.
My advice throughout this entire post is to choose the one with the highest odds of winning, according to your terms. But why do people fall into choosing the hard route?
Why people delude themselves to work hard
With the above examples, I just want to share how important it is to be very clear with what you want in life. The decisions you make should be aligned with your goals. They should take you closer.
Where most people make mistakes is in never truly realizing what they want from their lives. People think they want to become a millionaire, but in reality they want to be financially comfortable.
People think they want to start a business because it’s the best way to become wealthy. But in reality it’s an ego thing and they like the suffering.
And many more examples of not understanding what they truly want.
As silly as it may sound, a lot of it boils down to social clout. I mean it. People want the “bragging rights” more than they want the results. People want to be able to share how hard the odds are against them. How virtuous their path is. How no mere mortal is grinding as hard as they are…
A few years ago I learnt about Sprezzatura, a concept that deeply resonated with me and directly antagonizes the hustle culture popular in the online world. Rather than signaling how hard you’re working, Sprezzatura is the art of making everything seem easy and effortless.
Every path you go through is going to be hard and it is going to take time. You are no more virtuous than someone else just because you think you’re the only one working hard. In my opinion, what matters more is that you get results and achieve your goals.
To do so, it is easier to make better decisions and optimize for better odds.
Closing thoughts
Most of this post could be summarized with one thought exercise. There are two scenarios to choose from, with different odds:
If the bet goes well, you make $100K. If the bet goes wrong, you make $30K. Odds of achieving the $100K are 80%.
If the bet goes well, you make $1B. If the bet goes wrong, you lose $10M. Odds of achieving the $1B are zero point nothing percent.
I will always choose A. And I recommend you choose A.
It fits my risk profile. It fits my goals. It fits my mental model for the world. It might not fit yours.
Sure, the example is quite extreme. One is clearly a winning scenario and the other one is clearly a losing one. It doesn’t matter though. Even if the odds of B were 1%, for the vast majority of people on Earth it is a losing scenario.
Most of us people on Earth want nothing that is worth losing $10M on and ruining our lives forever. Not anything material at least.
But many of us make decisions with very poor odds that, if we truly thought about them and understood them, we wouldn’t think they’re worth the risk.
To finish, these mental crossroads are also very dumb to even present. Life isn’t static. Things change. Scenarios like these present themselves multiple times over one’s lifetime.
It’s never a “you only have one shot”. You will have multiple shots in your life at achieving what you want. As there will be multiple times in life where your goals will change.