Thread by @dunkhippo33

Tonight's tweet thread is about risk/reward and how to think about that in different aspects of your life.

Read on >>

1) Growing up, in school, we were basically taught not to take risk. In fact, the "touted" way to win at school is to follow directions, work really hard, and ace the things you do within the confines of school.

Take very little risk & you'll be rewarded for doing things right.

2) But post-school, I began to feel the game was different.

In fact, what made you successful in school (if you were) may not make you successful in a career. And vice versa - I've met so many ppl now who were not great in school but are wildly successful in their careers.

3) In fact, let's dive into careers. There are 2 kinds of jobs. Jobs where

1) You're a perfectionist. If you do everything right, you'll be successful.
2) You're a risk-taker. It's ok if you do almost nothing right but if whatever you do right is amazing, you'll be successful

4) Let's break this down. Here are some examples of jobs where you need to do everything right as a perfectionist:

-surgery
-being a lawyer
-loaning money

5) Here are some examples of jobs where it's ok if you don't do most things right, but when you do, it has to be really right. The risk-taker.

-baseball player (batting)
-poker player
-angel investor

6) Obviously there are many ways to find success. And success doesn't have to be monetary either.

But it's interesting that roles break down into these two groups: the perfectionist and the risk taker.

And the latter group must take risk, because they need a big outcome.

7) Let's dig into this a bit more. Let's take investing. If you're an angel investor, you think about things in terms of portfolio construction.

You're looking for 1 or 2 companies to really knock it out of the park.

8) And frankly, even if one of your companies does 10x, it won't even make a dent in your portfolio if you have another company that returns 100x.

How big the winners are is what matters -- not how many wins you have.

And I've talked about that here:

https://twitter.com/dunkhippo33/status/1351270052801048577?s=20

9) Now let's take loaning money. It may *seem* similar to angel investing - after all in both cases, you give a company money, and you hope they give you money back plus more.

But you need the exact opposite mentality & skill set for loaning money as you do for angel investing

10) For loaning money, your upside is capped, so you really can't afford to make *any* mistakes. Basically, all of your companies must return the cash you loaned.

And your success in loaning money is based on how many wins you have. You must be a perfectionist.

11) And you can apply these types of comparisons to so many other jobs in society.

Jobs really just come down to one of these two games: the perfectionist or the risk-taker.

As such, I think ppl need to really understand which game they are playing.

12) So let's dig into an example.

Say I'm a product manager. From a career perspective, I'd say being a PM is a perfectionist. You generally want to do well at all your PM jobs across your career.

You don't want to be amazing at one co and then bomb the next 7 PM jobs.

13) But if you zoom in a level to various tasks as part of being a PM, you can apply this framework as well, and interestingly, it's a different game than on a career horizon.

So for example, when I worked at Google, I worked with a product manager who was really good.

14) And this PM was great because of laser focus. In fact, this PM was actually pretty bad at or just didn't do many other things.

This PM never responded to emails about other stuff that wasn't relevant to the main focus and would bail on other things all the time.

15) But what moved the needle for Google? Just that one thing. And that PM would knock that one thing out of the park and literally drop the ball on everything else. That PM was a risk-taker in the role.

16) Now, maybe you may have a different approach or different bedside manner if you were in these shoes, but what's interesting is that sometimes you're a perfectionist on one time horizon and sometimes a risk-taker on another.

17) You can also zoom out of a role and apply the same thinking.

For example, when I was a founder, I would often hear about other entrepreneurs putting pressure on themselves that they need to do everything right, because this is their one shot with their company.

18) But, if you zoom one layer above, what you might think about things differently.

Many entrepreneurs have many chances at building multiple companies, which I've mentioned before:

https://twitter.com/dunkhippo33/status/1327005672957898752?s=20

19) And what that career actually looks like is an angel investor portfolio.

Instead of investing in 20 companies with $$, you may be trying 7 different ventures with your time across your career.

20) An entrepreneur's portfolio is often much more concentrated, but it looks very similar to an investor's portfolio.

The good news is that may take some of the pressure off. You can afford to be a risk-taker in this type of portfolio.

21) You don't just have one shot. You have many shots. And they don't all have to work out. In fact, statistically, they probably won't. To be successful, you really only need one of those to work well.

22) So as you go through scenarios you face in your life, think about which game you're playing -- the perfectionist game? Or the risk-taker game? And on what time horizon?