Ramit Sethi weighs leaving a high-paying job for a startup. He uses Jeff Bezos' regret-minimization framework: imagine yourself at 80 and ask what you'd regret more. Top performers can usually get rehired if the startup fails, and your risk tolerance drops with age, so the window to try is now.
Okay, here's an interesting question today from jb, who wants to know about making mistakes in his life. He writes, what if I take the leap out of the high paying, big firm job and don't succeed? What if I make a mistake? This question stood out to me because I wondered the exact same thing. See, when I was in college, I, I had finished four years and I was deciding whether to get a job or whether to stay at school and get my graduate degree. So I ended up talking to a ton of people, right? I had mentors, I had professors, friends, and at the same time I was applying to a bunch of jobs. So one of the job offers I got was for a really good hedge fund. And it was a high paying job and I would have had a lot of flexibility. It would have been a really cool job. So I went and asked my mentors, professors, friends, I said, you know, what do you think I should do? And some people said, take it. Some people said, stay. And one professor's advice really changed the way I looked at this decision and it made my decision for me. He said, ramit, why do you want to take this job? So that you can go and get a job and be a working person. You're going to be a working person for the rest of your life. Why not stay at school, enjoy what college has to offer you. When the time is right, you'll know it and that job will always be waiting for you. I thought to myself, you know what, that is absolutely right. Absolutely. In fact, later when I went and I actually accepted a job offer at Google, and I was about to start, and in the meantime I had started a tech company with another friend of mine and that tech company took off and I thought to myself, I'm going to turn down this amazing offer at Google. But here's what made the decision for me. I did turn it down because I knew I'm going to do this startup and if it works, I'm off to the races. If it doesn't work, I can always go back to Google or I can always go back to a big company. And this is the key. Top performers have a different way of evaluating risk and knowing what's going to happen in the future. So for example, ask yourself 20 years from now, looking back, this is also known as the Bezos Regret minimization framework. A very nice phrase that slips right off the tip of your tongue from Jeff Bezos of Amazon. He says, you know, looking back 20 years, 30 years, 40 years from now, would I regret not making that decision? And I think your question is, should I go from a big, high paying job to perhaps a risky, nimble startup? Is that worth the risk? One way of evaluating that risk is to say 40 years from now, looking back, would I regret staying or would I regret going? And I'm going to add my own wrinkle to this framework as well, and that is this. Top performers can almost always go back. If you leave a company and you were an amazing top performer, they'll probably take you back. Either they will or one of their competitors will. But as you get older, your risk tolerance goes down. I am more risk averse now than 10 years ago when I graduated from college. I've gotten kind of used to living a nice lifestyle. I have certain things I want to do. I want to live in a kind of apartment. I'm more risk averse. And one day when I have kids, when I have all kinds of other expenses, I'm going to be even more risk averse. So you know, you didn't tell me your age. If you're 50, that is something to consider. You're probably more risk averse than a 22 year old. But you want to know that yes, if this thing fails, you can probably go back either to that company or to competitor. And second, understand that it never gets easier than now. Five years from now, you're going to have more baggage, you're going to have more risk aversion and you want to be cognizant that naturally, as we go through life, we become more and more risk averse. So keep in mind as you go to make your decision, what's the worst that can happen? This company goes out of business, you depend on your savings for two or three months and then you go back and get a job at the big high paying company. If that sounds likely and you are a top performer, then that is one simple framework to evaluate the risk of your decision and make it very clear what you should do. Thanks for the question.
