Taking Risks with the Barbell Strategy
"People get entrepreneurial block for only one reason. It is not because they are not qualified. It is not because they are not passionate. It is because they are afraid." - Seth Godin
Creative people, like entrepreneurs, musicians, artists, and writers, don't always follow their creative calling because it feels too risky. There is a fear that their products, artwork, or music won't sell. They wonder how they will pay rent or afford health insurance or raise a family without a steady income. It becomes tempting to "sell out" and find a cushy job instead.
Fortunately, creative people, especially those scared of the risks associated with their calling, have another choice. They can try the barbell strategy.
The barbell strategy, when taking a risk, means combining a completely safe strategy together with an extremely risky one (and nothing in between). When starting a business, it means testing out your idea on a small scale while you still have a stable job, income, and health insurance. When writing a book, it means holding on to at least a part-time job to relieve your financial anxiety. When investing, it means holding a large portion of your portfolio in cash, and employing the rest in a risky strategy with large upside.
Some examples of activities that are very stable and very risky.
By combining extreme risk with extreme stability, you eliminate the risk of ruin. You have nothing to be afraid of. You can lose, but you can't lose everything. You can also win and create something - a business, a charity, a musical, anything.
You might object: aren't entrepreneurs (and other creatives) crazy risk-takers, who, like Mark Zuckerberg, suddenly drop out of a sure thing to follow their passion?
Not at all. Zimride, which eventually became the ride service company Lyft, was co-founded by John Zimmer while he worked a full-time job at Lehman Brothers, and until it showed promise, it remained merely a side gig for him. SoulCycle was co-founded by Julie Rice, and for over a year, she successfully built the fitness company while working as a full-time talent manager in New York City.
The barbell strategy applies to many writers as well. Kafka worked for an insurance company. Spinoza was a lens maker. Georges Simonen wrote almost 500 novels, but reportedly only wrote 60 days a year.
And most famously of all, Albert Einstein formulated his preliminary ideas on relativity while working at a patent office.
You don't have to risk it all to create something important or meaningful for yourself. You don't have to lock yourself in your room, for 100 hours a week, to work on your Next Big Thing. You don't have to drop out of Harvard or suddenly quit your cushy job. You can use the barbell strategy to hedge your risks without blunting your upside. At some point, you might go all-in on your new project or business. But it can be at a point where you're much more confident about the future.
It's at a point where you're being more prudent, and you're in better control of your fear, which paralyzes so many would-be entrepreneurs, artists, and other would-be creatives.
1) Antifragile by Nassim Taleb