Incrementalist and moonshoter - Asymmetric Risk Man

Going through life, you see a lot of stories about people who risked it all to succeed. While it is possible to do this, most of the people who succeed greatly, do so limiting their downside. They take risks that are smart and have big expected winnings and low cost. Ideally they are risking very little to win big.

It is hard to find these gambles in a lot of places, if you go to a casino they don't offer any of these. If you go to the stock market your odds are better but not amazing. The best way to find these opportunities is to build them yourself.


You can do this by taking the time to improve and develop small things. Leverage your average speed to build your skills, your strength and produce a lot of wonderful work. This is low risk, slow and steady development that provides you with a strong base to work from and something to fall back upon, so you don't have to jump off into risks where you can 'lose it all'. Continuing to develop your skills, health and life improves your options, it makes you better able to take advantage of/succeed at if a moonshot opportunity comes along.

How does this work?

Say you are a computer developer.

Build your skills step by step, work on becoming an excellent craftsman of programming, expand your skills to understand project management, people and delivering something of quality. There are opportunities for this everywhere, online courses to build your skill, major open source software programs looking for volunteers, and wherever you are working a chance to step up by providing high quality work.

If you are young without a family, live on less than you make, save and find out what really makes you happy.

When I went to grad school I came to realize how little spending money beyond a base level (food, exercise(gym fees and weights) and a place I was happy to live) made an impact on my happiness and how much more was found in spending time with friends, reading/watching things that stimulated(free or close to it) my mind and being active.

Finding out that makes it much easier to realize that losing money or not making more at a specific time is not losing it all. This frees you to spend less save more and worry a lot less.

Now you have a strong base, and if the opportunity to join a great startup comes up, you have a history of useful skills that will make you more likely to get the chance to join that startup and also make you very employable if the start-up goes out of business. Having a great skill set is a beautiful asymmetric bonus, it makes you more likely to succeed and lowers the cost of failure.

Once you have your base, work, learn, save, and keep your eyes out for the right opportunity, be it a internet start-up, a small biotech or just a business that you can see how with the right effort and skills you can build something that could explode.

Say you work for a large pharma company and develop good skills, when you are ready look for biotechs that have good culture and are undervalued (remember with your strong base you have the time to wait for the right pitch). Look at their data, assess their chance of success and assess the payout if they succeed. Often biotechs are either strongly over or undervalued independent of their chance of success due to the broader market environment.,

Find a time when things are undervalued and take a risk, you can join a company that if their product gets approved they will be worth at least 10x, with a greater than a 10% chance of success. You have a shot at a lottery ticket and anyways they will pay you in the interim, save your money, at +/- 20% of your income won't make a major difference in your life, particularly if you are working with good people and if you aim right you could change your life with a successful moonshot.

Bill Gates and Mark Zuckerberg always could go back to Harvard or get another job, so they had a base before they took a risk and had a moonshot that paid off. Don't risk it all, take the asymmetric bet!


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