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So I think that was an epiphany for me, the realization that this is a highly uncertain part and that I need to do something different. And this something different to me - I didn't really understand it formally. But I said, you know, "Probably what I need to do right now is try to cover my expenses." Cover my mortgage... |
**Gerhard Lazu:** Of course, of course. |
**Daniel Vassallo:** But anyway that I could, without necessarily being very picky, very choosy. I don't care about how sustainable it |
is, or how high the return on investment is; whatever I can, to at least have some baseline income. And literally, the next day, after I went through this week of anxiety, I picked up my phone, I went to my personal contacts, and I found a friend who needed some programming help, and I started doing some freelancing wi... |
And immediately, things started to -- one thing started to come after another. I was seeing these creators, the creator economy was flourishing, self-publishing, educational products, programming books, and whatever, and some of them making decent payoffs, some of them less so... And I said, "I have some technical cont... |
And over time, I kept experimenting with different ideas, some things worked, some things didn't, and I started to believe that this is a sound philosophy, and then, as I kept searching it more, I realized "This is nothing new." The operators in this world, like book publishers, venture capitalists in Silicon Valley, m... |
\[17:57\] And I started to see these parallels with how these industries operate, and I think many of their principles apply even to us as individuals. Yes, we're not investing capital, unlike a book publisher, or a venture capitalist who's investing their capital; we're investing our time. But it's equally scarce and ... |
So what's our time? We only get a few hours a day, that is disposable to our projects... How should we invest it? Should we go all-in for many years on one project? Is that a wise strategy? That would be like a venture capitalist going all-in with all their funds on one idea. It's almost never going to happen, right? |
**Gerhard Lazu:** Yeah, of course. |
**Daniel Vassallo:** Or should we sort of build a portfolio of small, safe to fail ideas, and have a good selection criteria for things that have a decent fighting chance of giving us a small payoff, keep building on those payoffs, keep building reputation, building assets, building sort of knowledge over time, and ben... |
**Break:** \[19:24\] |
**Gerhard Lazu:** How do you know when it's time to start a project or wind down a project? And I'm calling it a project, maybe that's the wrong word... |
**Daniel Vassallo:** No, I like project. So I think when to start is -- I think you need to have some selection criteria. When I talk about these ideas, some people react to "You know, it's probably not a good idea to just do random things." And I agree; you shouldn't just be trying random things, with no clue how they... |
So for example, when I created my AWS book, I thought "If I make $10,000 out of this, it would be great." I spent a month on it; if I were to earn $10,000, great. And I thought "Okay, what would it mean --" You know, this is a $30 book. Back then it was like that; how many people do I need to sell to to make $10,000? Y... |
\[22:20\] No guarantee that this was going to happen, but I had some idea that there's a chance, that there's a reasonable chance. So I think when you bump into an idea, and you see the potential for a small payoff, I think it's worth giving it a shot. And I think many people exclude ideas, because they're not sustaina... |
So when do you choose to start something? I think it's when sort of something meets your selection criteria. Is it something you can bring to market quickly? Is it something that you think you can bring to market on your own, or by yourself? Is it something that has a fighting chance of working, you can see some line o... |
When do you choose to wind something down? I try to, if possible, avoid even being in that position, right? Why do you need to shut something down? You need to shut something down presumably because it's costly to keep on the market, right? Either financially, or operationally, mentally, it's just a headache. If part o... |
**Gerhard Lazu:** Interesting. That's a very interesting perspective, because you're right, when you put a book out there, a course, something that's finished, in a sense, then you see what happens with it. And there's no need to do a version two, and there's no need to maintain it or anything. Once it's done, it's don... |
Now, I've been meaning to ask this for a long, long time... And the last cohort, the one in December - there were some very late nights, and I have to say, I was falling asleep around like 12 AM... I think it was like four for the Asian timezone... How do you go from the AWS book and the courses to chopping boards? How... |
**Daniel Vassallo:** Yeah, good question. I think it's this cat and mouse bad idea, it's like, I don't label myself anymore as a programmer, or as a writer, or anything. To me, I keep my eyes open for opportunities... And the cutting board started -- I started woodworking relatively recently, as a hobby, purely. I had ... |
\[26:03\] But as I was doing it more, I started thinking, "It would be nice if all the things that I'm figuring out, I could monetize some of these." And I was thinking, "Should it be an educational project? Should I make some physical products?" I was starting to get tempted into the eCommerce space, because I had no ... |
I created a few designs, I've set up a landing page, I shared it online, I got a few sales... To be completely honest, the cutting boards project didn't really pay off as I was expecting. I was hoping I'd get some recurring stream of orders over time. I did get a flurry of sales, I made a few thousand dollars the first... |
But to me, again, this is like recognizing luck, as we mentioned in the beginning. Once you keep your eyes open to new things, you start seeing opportunities that if you have the blinders on, you would fail to see. Personally, I made a course on how to sort of build an audience on social media. That was probably even m... |
So I highly encourage people, again, to let go of the labels... Yes, think of your skills, assets, everything you're into, what you like to do. There's opportunities in adjacent things. I like to say that with your skills, they should feel like an asset; you have the option to use them, but not an obligation. It is a m... |
**Gerhard Lazu:** Of course. |
**Daniel Vassallo:** But why? I mean, it's irrational. I should not feel an obligation to use it. Yes, I have the option, but there's many other things I could do or I could try. |
**Gerhard Lazu:** Yeah. So obviously, this approach, this mentality, and these ideas - they all start as ideas - they haven't worked just for you. They worked for many other people that are in the Small Bets community. Are there some examples that you can share with us? |
**Daniel Vassallo:** \[30:03\] There are a few. I'm not sure how willing they are for me to share publicly their numbers, or whatever... And success, again, is very relative. To some people -- many people in our community still have a full-time job, and they're not necessarily looking for, but they just wanted to have ... |
There's a few others who, yes, have taken a similar path, of starting with educational projects, mixing in software projects, other things, and going in many different directions, and have some highly unexpected successes in areas that they least expected... And to others, which I still -- this might sound may be a bit... |
I like to use the example - and I shared it on our Discord recently - related to woodworking. Recently, I bought a book about how to make your own doors. Well, recently - about a year ago. And I read it all, I enjoyed it, I learned a lot, but I never made my own door. And maybe I never will. Was that a regretted purcha... |
I think it's a similar thing over here - out of the 2000 members, I'm sure maybe only a very small percentage actually put everything in action, and are living off their projects. But there's a wide spectrum in between; some people are just getting started, some are just waiting for the right circumstances to happen, b... |
**Gerhard Lazu:** Well, if anyone is interested to see who is out there applying these skills, these ideas, you can always go to Daniel's Twitter. Sometimes you retweet what other people post... So you can check it out, see what examples are out there. And that is a very real world view as well. Real time, what is happ... |
**Daniel Vassallo:** Then I took a rest for nine years, but before that, I worked for other companies. Yeah. |
**Gerhard Lazu:** \[34:06\] So what was it like for you to be working at AWS as a software engineer? I'm assuming you also had -- was it always a software engineer? Or did you go into management? |
**Daniel Vassallo:** No, I was in a bit of a hybrid role in the last couple of years, but my official title was always a software engineer. |
**Gerhard Lazu:** Okay. What was that like for you? |
**Daniel Vassallo:** I went in thinking it was temporary. I think I always had the inclination that eventually I will want to work for myself. I grew up in a family of self-employed people, and I always sort of felt it's also in me that I want to control how I work, what I work on, and so on and so forth. When I joined... |
And again, it wasn't -- despite Amazon's reputation, it wasn't harsh work, or super-long hours. Yes, it took all my creative energy, that's for sure, and it was always something on my mind... But for a while, there was a period when I started to think "This isn't for me. Maybe I'll move companies. Maybe I'll go work at... |
So no matter how much more I was going to get promoted, or how much more money I was going to be making, I was still going to be working on somebody else's terms, on their own schedule, without lots of control over my time. And I'm not saying this is the right thing for everyone. I think it's important for us to recogn... |
So after that, it was mostly -- I spent another couple more years there, just figuring out when's the right time to leave, and at one point I wrapped up a project I was working on and I just took the plunge without anything concrete there. Long story short, nevertheless, I think I did learn some things, that I probably... |
\[38:03\] But my takeaway for me personally is that I realized almost for sure that the full-time work arrangement, nine to five, Monday to Friday, 40-hour workweek wasn't going to work for me, even in the most ideal situations. Even when I have a reasonably cushy job, well respected, highly paid, getting promoted, wit... |
**Gerhard Lazu:** Yeah, that's a good one... \[laughs\] |
**Daniel Vassallo:** That I need to make a radical change. |
**Gerhard Lazu:** Yeah. Okay. I think this conversation is really timely, because many people, with all the layoffs in the tech industry, may be worried about their job, or maybe they have lost their job. What would you say to those people? |
**Daniel Vassallo:** I think it's important to recognize, again, to recognize what our true, real preferences are, and to be really, really honest about ourselves. It's very easy to get fooled by signals from the outside, and what our friends are doing... We're all slightly different, and I genuinely believe this - it ... |
Yes, circumstances might require you right now where you want to keep up with it for a while, maybe for immigration issues, maybe for family, you're just about to have a baby, it's not the right time to make a big change - I understand those things. But once you start to see things as temporary, it's beneficial, becaus... |
Probably the worst thing one can do is be in an arrangement that is incompatible with their preferences. I think that's the biggest opportunity cost. In the modern world, when we talk about opportunity cost, we tend to think about financial opportunity cost. "Oh, I was doing this, I was making $100,000 a year, but I co... |
But if you realize that you're the kind of person that will flourish when you have an open schedule, you don't have somebody telling you exactly what you want to do... You want to wake up in the morning with nothing planned, and you just go aimlessly and you still sort of manage to do things - you probably would want s... |
Yes, it's a trade-off, you might lose benefits, or whatever... But again, what you're gaining instead is you get much more flexibility with your time; you can add more clients now. You can take time off without asking anyone's permission, right? And you can start to, again, build reputation, build testimonials, get a w... |
\[42:06\] And I mentioned the two extremes, and you could be in the middle. You like a bit of structure, you still would want to -- again, bringing back the DHH, Jason Fried people, I've read almost everything they've written; they seem to like some structure. Both of them, I think, they like to say, "I work from 10 to... |
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