How thinking in terms of asymmetric bets can change your career
You can capture the upside of a traditional degree by systematically taking a series of asymmetric bets.
An asymmetric object has parts or aspects that are not equal or equivalent. An opportunity with an asymmetric upside has a small downside risk but a large upside potential.
Investing in startups is a classic example of an asymmetric opportunity. The downside risk of investing in a startup is losing your invested capital. However, the upside is investing in Uber that turns $5,000 into $25 million (source).
Nassim Taleb writes in Fooled by Randomness:
“It is not how likely an event is to happen that matters, it is how much is made when it happens that should be the consideration. How frequent the profit is irrelevant; it is the magnitude of the outcome that counts.”
Taleb writes hundreds of pages about this idea, but the main point is simple: take many calculated risks with low downside and high potential upside. Many won’t pay off. But, when one does, it will make the effort worth it.
Related to a business career and education, systematically implementing this idea can have massive implications.
Naval Ravikant has a great tweet about this where he lists some asymmetric opportunities:
You can bucket asymmetric opportunities into three areas:
Creating, connecting, and investing.
Creating something has a low downside risk. In the worst case, people don’t find value in what you created, and you can iterate or stop building. However, the upside is huge.
For example, you can create a product on the side that turns into a business allowing you to follow your passion. For example, a MyMBA alumni created a direct-to-consumer brand during the program that has the potential to take off.
More simply, you can create a blog or podcast that connects you with leaders in your industry and demonstrates your knowledge and passion for a subject area. For example, Ryan Gavin, a MyMBA alumni, wrote an analysis of CarbonCure, which connected him with folks at CarbonCure and helped to further his career.
Creating has additional upsides that limit the downside of invested time:
- Learn more about a topic you’re interested in
- Build your personal brand by building in public
- Gain practical experience building a business even if it fails
- Learn more about your interests and skills
Connecting with others has a low downside risk. In the worst case, you don’t have a strong connection with the person and you maintain a loose relationship. However, the upside is huge.
For example, you could connect with someone who turns into a great friend. Or, you could connect with someone who presents you with a dream job opportunity. If you’re building a business, you could connect with someone who turns into a business partner or investor.
As another example, Tess, a MyMBA alumni, connected with an employee of a company she was interested in working for. After reaching out and building a relationship, her connection helped her through the interview process to land a role at the Management Consulting firm.
Of course, outside of business and career upside, connecting has the additional upside of meeting and learning from amazing people.
Certain types of investments are asymmetric opportunities. For example, as Naval says in his tweet, investing in startups or Bitcoin.
There are thousands of resources to learn how to become a better investor. The important part of taking asymmetric opportunities by investing is recognizing and capitalizing on the opportunities that have limited downside but high upside.
On a more meta level, investing in yourself by learning has an asymmetric upside. Reading a book or listening to a podcast at a certain point in your life can change your trajectory for a small time and capital investment.
Systematically take these asymmetric opportunities to create massive upside potential.
MyMBA is built with these in mind.
Every week, we write a short essay to publish online under our own name.
We prioritize connecting by bringing a cohort together, meeting with industry leaders, and building a system of connecting with others in our industries.
We invest in ourselves through learning from top business school professors (and keep the price low so you can invest money elsewhere!)
Learn more here.