Is it time to quit the Great Online Game?
Surviving the recession as an independent
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Last October, I left my job to go independent. Back then, Bitcoin was trading at $60,000 and the S&P was near all-time highs. Boy, do things feel different today.
From crashing crypto markets to startup layoffs it truly feels like Winter has arrived. As the cold sets in, many independent workers are wondering whether their career choices are still viable in the face of a looming recession. Is now the moment to return to the safety of traditional employment, or to continue playing The Great Online Game?
Why worry?
After a 13-year bull market, it’s hard to put yourself in a recessionary mindset. While boom times can support all kinds of nice-to-have products and services, recessions can make any profession precarious. To illustrate, picture an independent worker with a portfolio of income streams:
Consulting for startups
Running a cohort-based course
Writing a paid newsletter
While these income streams seem diversified, they are all subject to the same economic forces. As public market multiples compress, VCs start warning their portfolio companies about the challenges of raising money. That causes startups to cut expenses – including your consulting contract. Meanwhile, your cohort-based course that students used to expense suddenly drops in enrollment when company budgets tighten. As layoffs pick up, you find it harder to retain paid subscribers for your newsletter, let alone pick up new ones. You may be okay if this slowdown just lasts a few months, but are you prepared to ride it out for 1-2 years?
Extend your runway
The primary job of any startup CEO is to make sure their company doesn’t run out of money. As a company of one, this job is even more critical for independents. When a startup’s bank account hits zero, the company loses its office space. When a human runs out of money he loses his apartment.
Over the past month, startup CEOs have all become laser-focused on the length of their runway. That is how many months their companies can continue to meet financial obligations given the amount of cash they are spending. This is a useful exercise for individuals as well.
Given your personal burn rate, how long before your bank account reaches zero? If that number feels small (shorter than 12 months) there are a few reliable ways you can increase the length of your runway:
Earn more money – If you think there are easy ways to earn more without making a massive career shift (like charging more for your services), it’s probably worth pulling this lever. If earning more requires a big career change that you’re not excited about, hold off until you’ve considered other options.
Sell some stuff – While it’s not ideal to sell assets during a bear market, selling can give you peace of mind and allow you to preserve your independence.
Lower your burn rate – Out of all three options, cutting expenses is probably the least painful. To start, examine your monthly spending and trim any recurring purchases that no longer feel critical to your well-being.
Don’t blame yourself
Coming to terms with your financial reality can be a humbling moment that triggers all sorts of emotions. As you process them, remember that you made the best choices you could with the information you had.
While the present economic climate may seem obvious in hindsight, no one can see the future. There are plenty of professional investors who get paid to predict recessions yet still managed to lose money for clients. Don’t blame yourself for missing it.
Besides, it's not like that company you left is immune to the recession either. Plenty of organizations are in the process of executing serious layoffs and the employees who are spared will have equity that is worth considerably less than this time last year. That doesn’t mean your former co-workers made bad choices either, it’s simply a reminder that we’re all experiencing the same unpleasant economic reality.
No shame in returning to safety
There is no shame in returning to the steady salary and benefits of full-time employment. While pursuing your passion is exciting, paying bills and staying out of debt never goes out of style. If your goal is to minimize deathbed regrets, you can safely assume that providing for your family during a hard economic moment won’t be a decision you later regret.
You will have other opportunities in your life to strike out on your own. Good economic times will return. And, when they do you can take another shot at independence.
If you do decide to return to the traditional job market, recognize that you are not the same person you were before you left. You have collected new skills and experiences that should help you take on new types of roles. Who knows– you may even find a job that suits you better than the work you were doing as an independent.
The changing meta of the Great Online Game
If you choose to keep playing the Great Online Game, recognize that the meta (the principles that govern the game) has changed. While people and products will continue having sudden meteoric rises, we are no longer living in an economic climate where every player will continue looking like a genius. There will be many more promising ideas that get no traction and more hype-fueled assets that experience sizable crashes. Those that succeed in this next phase will likely be those who update their strategy to match the new meta of the game.
As someone who’s committed to playing, I’ve made three big shifts in my strategy:
Maintain Focus – When I initially went independent, I overloaded my plate with commitments including a newsletter, two consulting gigs, a talent collective, a portfolio of investments, and a web3 education project. Part of me knew this was too much to take on, but I wanted to explore what energized me. As the market has shifted and different projects have revealed their potential, I’ve been actively cutting commitments to ensure that I have the energy to devote to the projects that have the most promise.
Team Up – Sailing alone is a fine strategy when the winds are blowing in your direction. But as soon as you need to take up the oars, you want partners who will row with you. I’ve opted to prioritize projects that allow me to partner with smart people who can help me navigate the rough waters ahead.
Take Time – During a bull market, it’s easy to develop a false sense of urgency. You spot opportunities and feel the need to jump in quickly to maximize your upside. While this mindset has served me well in the past, I’m now at a point where I’m fine waiting and derisking opportunities if it helps preserve my ability to keep playing.
Playing the Infinite Game
Author James Carse once wrote that “there are at least two kinds of games. One could be called finite; the other infinite. A finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play.” As someone who cherishes independence, I’ve realized that rather than trying to win, my primary goal is to continue playing.
During the dotcom boom of the late 90s, a number of investors and founders flooded into Silicon Valley to make a quick buck and behaved badly when the markets took a turn. Most of them have names you wouldn’t recognize because they were never able to get back in the game after burning their reputations.
If you have your sights set on the infinite game, the most important thing you can do is preserve your ability to play. That means not going broke and pursuing risky opportunities. It means not burning your reputation out of a scarcity mindset. It’s about continuing to learn and invest in your mental wealth. Those who thoughtfully navigate the challenges ahead will set themselves up as players of the infinite game.
For Your Information Diet
🧠 Why we stopped making Einsteins – Despite the explosion of freely accessible information humanity has seen reletively little advancement in the arts and sciences. Could this be due to our inability to cultivate new geniuses? (The Intrinsic Perspective)
📜 Lands of Lorecraft – Communities operate on a set of shared narratives, known as lore. To cultivate a powerful lore, community leaders need to take the approach of a gardner. (Breaking Smart)
😡 Why No One Trusts Anything – In our individualistic era, leaders are more inclined to leverage their institutional affiliation to build audiences and personal brands than to uphold to the missions of the institutions they serve. As more individuals choose to defect, socetial trust has declined. (Honestly)
🌎 The World Order Reset – Russia’s war with Ukraine has instigated a pivotal reversal in the decline of the Trans-Atlantic Western alliance. How might it shape the future of geopolitical power? (The Upheval)
🍎 Edutainment 3.0 – The missing ingredient in education isn’t good content– it’s the motivational structures that get learners to focus. This report digs into trends at the intersection of education and entertainment that are powering the next wave or learning experiences. (Wavetable)
Invisible College Update
Invisible College just launched our first cohort-based course!
The course, which is taught by my partner Rockwell Shah, is a masterclass on Bitcoin. If you’re interested in enrolling, you can sign up here or buy a Decentralien NFT which comes with free access to our full catalog of current and future courses.
If you have questions about joining, don’t hesitate to shoot me an email.
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Until next time,
Great read, and even if it's temporary, it was great to see you back in my inbox.
Ps. loved the graphic ;)