
Scalable vs. Non-Scalable Careers - neilc
http://ben.casnocha.com/2009/03/scalable-vs-non-scalable-careers.html
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daleharvey
A hooker can marry a millionaire and get loaded, the "cap" on consultants /
lawyers can be pretty high, a dentist could patent a new tool / technique,
write a book, or just be happy with a pretty good wage.

I find most of the talk like this pretty irrelevant, do what you enjoy, then
if you really want money, figure out the best way from there. I would much
rather be an expert in the career I chose than be a "Career expert"

~~~
cellis
_A hooker can marry a millionaire and get loaded, the "cap" on consultants /
lawyers can be pretty high, a dentist could patent a new tool / technique,
write a book, or just be happy with a pretty good wage._

Let us, then, limit this discussion to the _average_ career person. The
_average_ Wall Streeter was making $300,000 a year 2005 - 2008. The average
software developer is making, i think, 75-80,000 a year. And so on.

~~~
daleharvey
why bother caring about the average pay?, there are people that make a hell of
a lot of money doing virtually any job.

Just pick something that you enjoy, then you have a better chance of doing
better than the average, and if you dont make your millions, then youve
enjoyed the ride.

~~~
mixmax
In a discussion like this you need to talk about averages, otherwise you can
claim anything. Your example with the hooker shows that she can make a
million, but I can just as easily come up with an example of the hooker that
repeatedly got robbed by her pimp and made no money at all. Neither example
proves anything about the average hooker.

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menloparkbum
As a startup casualty, I can relate to this.

I've been an early stage employee (< 10) at 4 startups over the past 10 years
and I haven't made a dime, relatively speaking. These weren't obviously doomed
startups, either. At least one of them is still wistfully mentioned by other
successful software entrepreneurs as an inspiration[1].

It is a bit trying on your psyche when personal friends have 10s of millions
of dollars and you're scrambling to justify why you want to get paid $100K. In
a down economy, you often are scrambling to justify why you want to get paid
$60K or should be hired at all. At these times those jobs where even the worst
get paid $150K sound like a better idea.

Of course it's not all about the money but your landlord, wife, kids,
potential dates, aging parents, car salesman and cellular data plan provider
will tell you otherwise.

[1] None of whom actually worked at that startup

~~~
mikebo
Yeah, I too know this feeling. I started out my career working at a BigCo
making a nice salary/stock/bonus. After 3 years there I left to join a early
startup (engineer #4) and took a 30% paycut so I could get more stock.

2.5 years later and I've earned a bunch more stock grants, but my salary has
stayed flat (my choice -- we were on a good trajectory so I always preferred
stock options over salary bumps). Now our prospects are not looking good and I
doubt there is any upside to the stock.

I definitely considered this scenario when deciding to join the startup, and I
always rationalized it as "at the very least it will be a good experience".
Well, it definitely was good experience, and I learned a lot more at the
startup than the BigCo, but as I consider my next career move I'm not exactly
sure what the right move is.

Who knows, w/ the economy how it is I will probably just have to take what I
can get :).

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jwesley
What this leaves out is Taleb's advice from the book -- to pick a non-scalable
career that is guaranteed to pay a high wage. His reasoning is that scalable
careers are at the mercy of Black Swans. The vast majority of rewards are
distributed to the lucky few at the top. This is not due to any remarkable
talent, but luck and the nature of scalable success (it builds upon itself).
If you hope to become an author who sells a million copies of a book, you will
almost certainly wind up never selling more than a few thousand, while the guy
at the top who is no more talented sells millions upon millions.

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jeremyw
Hmm, are software startups really high risk to founders? Does this argument
even matter?

Liberal industry culture lets founders move in and out of startups, consulting
and full-time arrangements. High compensation lets founding teams take
sabbaticals often. If one has a reasonably low cost of living and a solid
hourly rate, working 1/3 of the year vends 2/3s startup time.

Given that PG has said many YC founders are older, I'd expect they've moved
into the low-risk category, extra responsibilities of life included. And the
cost of software startups keeps coming down.

Edit: ignoring non-software, here.

~~~
chris11
I'm curious about this. I've heard that failure is a badge of honor in Silicon
Valley.

But I'm not comfortable starting up a company and going bankrupt. So if I was
involved in a start up that ended up going bankrupt, how would that affect my
career options? Is the employment rate for founders of failed executives high
because a lot of jobs are open to them, or because the ones who can't find
jobs end up quickly leaving Silicon Valley?

I realize that this probably isn't the right attitude to have if I would take
a risk like founding a company. I'm just trying to decide how comfortable I am
with the worst case scenario.

~~~
nostrademons
In my experience, nobody cares. Most people admire you for having the guts to
have started one in the first place, and executives (often people who have
started companies too, and have buried them) will be happy to hire you.

And I actually moved _into_ Silicon Valley, coming off a failed startup. I'm
not sure I could've gotten my job here otherwise.

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ph0rque
> Bottom Line: If you swing for the fences, you'll either hit a home run or
> strike out. If you swing for a single or double, you'll probably get there,
> but no farther.

What about doing both: swinging for a double for a while, then swinging for
the fences (saving up money, then taking up to a year to try a startup)? Or,
swinging for a double during the day, then swinging for the fences on the
side, until you're successful enough to hit home runs full time (37S model)?

~~~
cellis
OR, just steal a bunch of bases. /

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akikuchi
While I think the concept of scalability in careers is very interesting, I'm
not sure Taleb's "look at everything in the world in the context of my last
book's title" framework provides the right perspective for the discussion.
While the true home runs are indeed low probability events, risk/reward is
quite asymmetrical in many scalable careers(i.e. there are no fat-tails to the
downside). In the case of the author, the worst case is you spend a year
writing a book, and receive zero revenue from the book. That is a pretty well
defined worst-case, and is not particularly disastrous (assuming you can
afford your expenses while writing).

Put differently, scalability does not imply high-risk. In the most literal
sense though, non-scalability does imply limited potential reward.

~~~
keeptrying
I agree this is a good topic and it shouldnt just have to be centered around
probability.

The scalability idea points to the fact that starting a company while your
working for someone else is not a bad idea. If you can make 100K-200K doing a
9-5 job then you should keep it and keep trying to start businesses until you
succeed.

Live cheaply and execute as many ideas as you can. Ie your job is your VC. Now
this is obviously not easy but if you can build the emotional and hard-working
capacity for this I think its possible.

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njharman
I got a better idea, pick a fucking career you enjoy instead of one with the
highest ROI. Money (beyond necessities) is a worthless life goal.

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adamc
Not much in this that you couldn't get by reading The Black Swan, which has a
lot of other interesting content.

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davi
This attribute isn't quite boolean.

For example, a big rock band may have to show up to do a set, but the
dissemination of their music (i.e. advertisement for their live shows) is now
highly scalable.

($1000 tickets for upcoming Phish show:
[http://www.nytimes.com/2009/03/05/arts/music/05phish.html?pa...](http://www.nytimes.com/2009/03/05/arts/music/05phish.html?pagewanted=all))

~~~
antiform
I'm not sure I follow your reasoning. Rock bands are scalable careers. They
don't get paid a wage, and the income between the top performers and the mass
of wannabes is huge. Being physically present is not a necessary nor
sufficient condition for non-scalability. To serve a marginal customer, rock
bands essentially don't have to do anything, but doctors need to put in time
for the new patient.

~~~
nostrademons
How about computers, then? Working as a software engineering employee or
contractor is not a scalable profession: you get paid for your time, and your
time is limited. However, working as a micro-ISV or startup founder _is_
scalable: you get paid for selling a product, and it costs you nothing to
produce additional copies of that product.

I think the grandparent's point is that some careers have multiple business
models, some of which are scalable and some of which are not. So scalability
is not a property of the career, but rather of a particular revenue stream.
Heck, many firms do both, like his example of a rock band, or like the
software company that both sells a product and then makes money supporting
that product (eg. RedHat, 37signals, and Fog Creek).

~~~
antiform
Thanks. Now I think I understand. I guess it would be the difference between,
say, a session musician or your average member in an orchestra versus a rock
band trying to make it big.

However, if you focus on _how_ you get paid rather than the cost of marginal
increase in the big-picture sense, are there any purely scalable careers?
Every scalable job has parts where you need to be present, from writing books
to writing code. Clearly skills like writing well and proficiency in coding
can work for most multiple jobs; you can just as easily be a journalist
instead of nonfiction writer, for example.

Regardless, it feels great to be able to code. It's something I love to do,
and can take different forms with every job. Sometimes, life is just good.

~~~
nostrademons
If you wanna put it in economics terms, it's basically the difference between
fixed costs and variable costs. Scalable professions have high fixed costs and
low (or no) variable costs. So it may take you 10 years to learn how to
program well and 3 years to write a killer application, but then once you've
done that, you can sell as many copies as people will buy for zero cost.
Naturally, this is high risk & high reward: many people give up before they've
built a product that other people will buy.

It gets a little complicated because in a profession that's innately scalable
(like computers, writing, or any sort of IP), the distinction between scalable
and unscalable business models usually comes down to who's bearing the risk.
So, if you're an entrepreneur, you front all of the fixed costs of developing
the product yourself (or you get investors to do it in exchange for equity).
In return, you get all the rewards if it's successful. However, if you're an
employee, you sell your labor for a fixed price (= unscalable, since you have
only a fixed amount of time), and then the company bears the risk of the
product not succeeding in the market.

Personally, I think you should think of an employer as an insurance company:
they underwrite the risk that your venture will fail in the marketplace, in
exchange for taking the vast majority of the rewards if it succeeds. Whether
or not this is a good tradeoff depends a lot on things like external economic
circumstances, your skill level, ideas you have for new markets, etc.

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aneesh
> "Career experts generally favor scalable professions."

Says who? In my experience, "career experts" want to make sure their advisees
get a decent job. If 90% of people who follow your advice fail at their
career, I'm betting you don't stay a "career expert" for very long.

~~~
dkarl
"Career experts" mostly sell books and enthusiasm. Failure ensures repeat
business.

Consider how much you can earn as a doctor or lawyer by choosing a lucrative
specialty and working to establish yourself in the field -- why does he
discount that? Because he's selling a dream, not a career. It's hard to
fantasize about going to medical school, doing a residency, and then doing
further postgraduate work, especially if you're already out of school. It's
easy to fantasize about entrepreneurship.

~~~
ahoyhere
> It's easy to fantasize about entrepreneurship.

Nail, head.

HN is entrepreneur-porn.

~~~
gojomo
_HN is entrepreneur-porn._

Indeed. HN can inform and motivate.

But simply reading HN also satisfies the startup itch a little... and can thus
wind up being an ersatz substitute for the real thing. For each person HN
encourages, it might also satiate another in place.

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trop
It's vaguely charming/ironic that the Casnocha is doing pretty good in the
scalable world of getting blog posts chatted about... Out of all the millions
of blog posts, to be one of the few that random people will look at today...

------
yason
A career should be about what you want to do, not about how much money you can
make.

~~~
gaius
A _life_ should be about what you want to do, not how much money you can make.
But if making as much money as you can at your job is necessary to finance
your life goals, then that's fair enough. Work to live, don't live to work.
I've friends who simply make as much money as they can 4-6 months of the year
and devote the rest of their time to personal projects, and there's nothing
wrong with that.

~~~
yason
Such trade-offs are common but they're still trade-offs. You're still
effectively dividing yourself into two halves, and only because you're lacking
the trust that life will favor those who engage fully to its offerings.

I don't mean to preach here as only you can know what kind of life is good for
you at the time. But I think there's a immensely deep question beyond; that's
why realising what you want is so damn hard in practise!

The reason I'm insisting on this is that I'm slowly beginning to hit the hard
wall myself. I don't fully trust life myself either, yet. Trust also means
letting go of lots of things you've believed that are important but which
you're only attached to. Still, I'm afraid I can't prolong the current state
of affairs for too long.

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subhash
Aim for mediocrity because you'll pretty much get there anyway. And restrain
your kids so they don't think big. Perfect recipes for a boring life.

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newt0311
Baahh... Its the old Risk v. Rewards thing all over again. Also easily
explainable by standard economic theory. If some career/job/etc... carries a
high risk of failure then those who succeed have to be richly rewarded to main
the expected value at about the same.

