Career Advice and Some Small Announcements
Level 1 - NGMI
Welcome Avatar! As expected the number of layoffs is going up and we expect this to continue through March. Anyone following for a while knows we mentioned this dynamic about 8 months ago so the news isn’t a surprise. The more important part of this post is as follows: “How to maximize career earnings”.
We’ve only got a background in Wall Street (careers) so all of it must be taken with a slight grain of salt. We’re confident the first part applies to all industries but as you get to more complicated strategies later, it is likely Wall Street Specific.
Part 1: Basic Career Advice for All
You already know this. You will *practically* never get rich from a career. Read that sentence carefully. One of the main reasons why we yell “wifi biz” everyday like lunatics is because it is true. Without an online business (SaaS and E-com being the *most likely* success stories), the probability of getting rich is just too low. There are several reasons: 1) if you lose your job/career most end up eating into savings so they lose more than just a year of effort, 2) your job/career will pay you less than you are generating by definition - otherwise the firm would lose money and your boss would be fired, 3) the number of high paying positions is a “triangle” shape by design, so the probabilities get harder and harder: “being moved up” is not a guarantee. No matter what, there are significantly less Directors at a firm vs. Associates/entry level so you know attrition occurs and 4) you can’t *sell* your job/career. If you make $100K on a W-2 versus $100K on a business the business is likely worth at least $300K+!
Since you can sell at a multiple of the cash flows generated.
Rule #1: Politics Are Major
With the disclaimer out of the way, politics are the biggest “luck” factor in the whole game. We put it in quotes since each organization does operate the same. You want to work for the biggest revenue generators since they have the most “say” within the organization. If there are 4 major guys at your firm, with one of them making 2x what the other three make… Do everything you can to get under his/her umbrella.
If you are well liked within an organization from a political view (socially/big wigs like you), you can’t leave. That’s right. There is practically no reason to leave because (again) it is luck that you are able to successfully latch onto the right person.
If you have a choice between making $200K and $230K at a new place, you stay at the first place since: 1) you can get promoted and 2) there is a 50/50 coin flip chance of being well liked at the next firm (Huge risk)
Rule #2: Every Industry is Like Poker - Get to the Richest Table
In the end, you’re going to make *much* more every single time you move up the ladder. IE. much better to be a Vice President at William Blair than an Associate at a bulge bracket if you *know* you’ll never be promoted ever again at the bulge bracket. This is something younger people have a tough time grasping. They care about “prestige” since this is engrained into people on day one (Prestigious college, prestigious company etc.).
Only broke people care about these things.
Your goal is to make as much as you can without putting in maximum effort.
Rule #3: Minimum to Make Promotions
Every single job is *at will*. If you’re performing in the top 15-25% while working 10 hours a week. That is a problem for the other employees not for you.
Read that again. If your performance reviews are always in the top 15-25% or so, you’re practically always in line for promotion and you should *minimize* your effort at that point. There is no reason to be #1 since the difference between being ranked #1/20 and #3 of 20 is rarely more than a few thousand dollars after tax. Not worth it.
Rule #4: Protect Your Pay Grade
If you are an Associate, you want the largest number of associates at your firm. You also want to make sure no one gets fired. If you are a VP the same concept applies.
This is because you want to make it easier to be in the top 20% and you don’t want to lower your own status.
This is a simple concept but most have a hard time getting it. It’s best explained with numbers. If you’re ranked #5/20 you’re doing great. Now if you decide to go full crazy mode and encourage layoffs for your “group” watch how fast you get crushed. Say they cut the bottom 50% (10 people).
Well your review comes up next year, you’re not getting promoted at all. Why? You’re #5/10 mediocre at best. You now have to work longer hours, grind and play politics etc. Just so you can move up 3 slots to be #2/10 and be back into the top 20%.
You played yourself.
Think twice before you encourage laying off poor performers in your own pay grade. Ideally you want poor performers laid off in the pay grade *above* you since that likely leads to openings the next time the firm needs to hire.
Rule #5: Work in a Cyclical Way
This is more Wall Street but pretty sure it works in all industries. Every 3 years or so you’re up for promotion. Effectively, *99%* never get promoted until their 3 year analyst stint is done. Or. The ~3 years of being an associate (ignoring the stub half year to keep it simple).
This means the following: 1) year one you kill yourself establish yourself as an amazing worker first 6 months, 2) prioritize and cruise from year 0.5 to 1.75-2.0 and 3) the promotion year run it up hard and grind to secure the promotion. Go back to step 1.
As you can see, by doing this you will make it a lot easier for you to avoid burning out. It gives you *more* time to build up your WiFi business. And. You don’t lose any significant money
Bonus Notes
Layoffs generally occur 1-2 months before the fiscal year end for the firm. So. If it is December 31 like most companies, this means October to November rough range
If the company does not cut “enough* they typically do another round 3 months later. This would be February/March of the following year (assumes fiscal year ends December)
No one can say they are doing anything wrong “morally” if you’re working 20 hours a week but are still ranked #3/15. All that says is you’re more productive and the firm is happy with your performance
Part 2: More Advanced Career Rules
Assuming you follow our recommendations and are building out a second stream of income... You will unlikely get promoted more than 1-2 times. After that you should begin pressing hard on your other income stream and doing the bare minimum at work (it is pretty easy to be a middle of the pack performer with limited effort)
Advanced Rule #1: Don’t Quit Until 2x Net Income
We’ve seen this mistake too many times. Any business is extremely volatile. This means you should *not* quit until your post tax earnings is 2x your W-2 career earnings.
Before people say “ohh I already make $100,000 though”, it is *post tax*.
If you are running a company you get loads of deductions. You can move your headquarters. You can add some revenue lines like ads for a basic website to get you over a small number clearance. So on and so forth.
While you can *try* to quit earlier, we don’t recommend it. Once you quit and work for yourself there is basically no chance you ever go back. So. Better to do it, quit for good and close the door behind you.
Advanced Rule #2: Get Competing Offers
If you stay at the firm too long, you will eventually be underpaid. This is because the firm will always try to maximize profits. As a rule of thumb you should get a competing offer after your *second* promotion.
For banking if you have an analyst to associate promote. You have a 10 point IQ for leaving that firm. Do not leave.
You’ve dodged the MBA program debt disaster and even if your firm doesn’t pay top of the street, it is peanuts vs. the upside you’re getting.
The right time to try and secure a competing offer is around the VP level. This does two things: 1) it ensures you’re getting the right pay for your performance/level and 2) it keeps your company/firm honest about your numbers. After the second promotion (rough rule), the percentage differences do matter a bit. Get a competing offer to lock in market rates.
Note: by doing this you’re also solidifying yourself as a smart operator within the firm. The Company will respect your moves assuming you do it with class and it will actually raise your status at the firm. Why? You’re proving you can be a good negotiator which is part of the job in the first place…
Advanced Rule #3: Art vs. Science - Don’t Burn the Bridges
Don’t over do the second rule. If you constantly interview and constantly put pressure on the firm, they will resent you. This is again more art than science. General rule is you shouldn’t be doing this every single year unless it is some crazy bull market like the 1999 technology days.
Instead you should do it every 3-4 years or so at at most.
If you do it too much, you won’t be able to get competing offers since the industry knows what your strategy is.
Advanced Rule #4: Get Cut
After you are certain you’re ready to leave the rat race. You want to be laid off. You don’t quit. You don’t get fired. You just slowly do the minimum until you get taken out.
There are several reasons for this: 1) it’s a free pay check, 2) you get healthcare for free in the interim and 3) you’ll be absolutely shocked that being in the middle takes next to no effort at all.
There are certainly situations where you need to quit. That said 99% of the time you want to just put the car into cruise control and wait it out. Again. If you’re getting middle of pack reviews and not doing much, that’s great. For many people five hours of work is more valuable than 40 hours of work from a low performer
Advanced Rule #5: You’re “Never” a Home Owner
Most people jump to tell people they bought a house. You? You’re a single person with no roots. Why? They can’t bleed you out.
Many companies love to hear when an employee buys a home. It means they are trapped with a massive mortgage and the firm knows they are reliant on them.
This sound cut throat? Good. Welcome to reality. It is how the world works!
This is also why you shouldn’t feel bad about being a mediocre performer as you’re on your way out.
Bonus Pool for Banking!
For those that found us years ago in the IB days we have some news for you. Bonuses are down big. Not surprising to anyone since IPO volume is down some 95%
For those curious here is the rough math: Top performers down 25% (bonus), Bottom performers down 50% (some getting a zero/layoff package) and the middle is going to be down 33-40% (rough range).
Simple Calculation: A typical associate will make somewhere around $350-400K. We’ll make the math simple and say $180K base and $180K bonus. Assuming you’re a middle of the pack person you’d be down 33-40%. This means $108-$120K bonus versus $180K.
As usual always exceptions to the rule (niche boutiques with blowout years). That said, it’s the rough range. Even MDs usually making $1M would be closer to the $850K range in this bear market (assuming they don’t get fired).
Jungle Too Big to Ignore!
Despite being an anon online, we’ve got a large enough community to be making the 2022 influencer list. Guess avoiding ref links to exchanges and avoiding scams like BlockFi/Celsisus etc was worth it after all! (Source)
More Influencer Scams 2023 Expected: For those that haven’t noticed. Most influencers have been making up their email subscriber base and their following for all of 2020-2021. This isn’t difficult to see on this platform alone.
If someone has 10x your followers there is no mathematical way for them to make less than you on paid content (unless the emails and subscribers are all lead generation/third world country auto population). There is no way for firms to check for this however, the conversion rates never lie (anyone with even 15 mins of e-com background can run the numbers!)
In before a guy who has never run an online business says “but % conversion is different”. The reality for anyone who has run anything is that 10x delta is not possible in the same industry. This would be akin to 8 standard deviations in a bad way.
Thank You to BowTiedTamarin and SaaSCapo
They worked together to put a quick ad/video which is below. Big thanks to them and we’ll be sure to build out other social media avenues through 2023. Our best guess ins 2023-2024 will be the real time test here since most will be forced to work extremely hard.
Simple Career Questions
To keep this simple happy to take any career specific questions here.
Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce. We’re an advisor for Synapse Protocol and on the JPEG team.
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