A Twitter thread by Erik Torenberg.

1/ It’s interesting to look at career strategy applied through the lens of risk.

Most people think about financial risk, but reputational risk is far more insidious inhibitor of people pursuing ideas that at first seem weird but then become widely held.

Exhibit A: Crypto.

2/ Many prominent crypto fund managers are in their early/mid 20s, whereas most successful tech VCs are often 2x their age.

There’s no axiomatic reason for this age difference. VCs in theory should have the same advantages: investing acumen, op experience, relationships, etc.

3/ Why is this not the case? A form of Innovator’s Dilemma at work:

In 2014, It was far easier for VCs to cater to existing customers (traditional tech startups) than to sacrifice that and explore this new space (crypto) that was weird, unproven, and entailed reputation risk.

4/ Consider Kyle Samani, one of the aforementioned young hedge fund managers (representative of larger trend)

In 2016, he was 26, unemployed, unknown, and playing a lot of video games.  

He got into crypto.

5/ In 2015/2016, Crypto had the following attributes, among others:

1) Financial opportunity still largely unclear.
2) Specializing in crypto entailed reputational risk.
3) You needed to spend a lot of focused time in different social/intellectual circles to get smart.

6/ In 2015 if you had something to lose, it was a lot harder to get into crypto. Financially risky. Took a lot of time.

You also took real reputation risk - if it didn’t work, you’d look dumb.

And there was this already tried and true way of making money, so why risk it?

7/ So in 2015, the best person suited to get into crypto was someone who didn’t have a lot at stake, financially, or reputation-wise.

Or, in other words -- a 26, unemployed, unknown, person with lots of time on their hands.

Bonus points if you had a cartoon twitter avatar.

8/ It’s worth noting that the biggest risk was neither financial nor had to do with time -- it was the reputational risk.

The 26 year old mentioned above, Kyle Samani, before crypto started a company using Google Glass.

People still make memes of him to this day for that.

9/ Even within crypto, for another, more specific example, Myles Snider is going all in on EOS, leaving a cushy job.

Lots of people think EOS is a dumb idea--or worse.

The risk has an asymmetric payoff: If he’s right, he wins big. If he’s not, who cares—he’s 25, people forget.

10/ Indeed. Years spent on failed ideas are often forgotten when success comes along.

e.g. Ever heard of Reid Hoffman’s "SocialNet"? Nope, because LinkedIn, Greylock.

e.g. Ever heard of Marc Andreessen’s “Ning”? Nope, because Netscape, a16z.

11/ I think the biggest career mistake young people make is they’re afraid to look dumb, so they follow safe paths that cap their downside, not realizing that they also cap their upside.

And said paths are often tournament-style competitions, + perhaps not as safe as they think

12/ Another mistake is premature self-labeling/optimization, which closes off other, hidden, opportunities.

13/ If you can, take smart bets that have asymmetric pay-offs: If you win, you win big. If not, onwards.

Especially if you’re young, you can always blame it on youth, or find some way to rationalize post-facto. (“Google Glass could have been huge. It was ahead of its time...”)

14/ If you're not afraid to look dumb for a certain period of time, you can benefit from sort of a social-cultural arbitrage.

If you're not afraid to look dumb for a certain period of time, you’ll take high upside bets that others won’t take, + keep trying when last try fails.

15/ It’s worth emphasizing the “certain period of time”.

To the extent that one wants to be seen as "smart", the goal is not to look "smart" at every step of the way-it’s to look "smart at the *end*, + often you have to look dumb for a certain period of time to get there.

16/ This is where the stay foolish part comes from in Steve Job’s speech.

Sometimes, however, you look dumb forever, so you want to pursue something that, even if bombs, the pursuit was its own reward.