The Simple Math of Self-Employment

It’s so easy for us to get overwhelmed at the complexity of starting a business or becoming self-employed. You do some calculations of how much money it would take to get there, and it’s disheartening. “How in the hell am I supposed to make that much money?” You get overwhelmed thinking of all the energy, time, and resources that will go into making a product great enough to be expensive enough to earn you that much. For some reason, I begin imagining having to start and run a huge factory. The complexity of it all blows over me and I’m just paralyzed and disheartened. “Only people who have the fortitude or the fortune to buy a factory can start businesses,” I conclude, “And that’s not me.”

This mindset told me that the only way I was going to be able to earn income sufficient enough to leave my job was to have a break-out hit product, a videogame that was just so awesome that it earned me money without me even having to try, like Minecraft. The “earn money without even having to try” was my fear-driven fantasy that conveniently allowed me to avoid thinking about that overwhelming factories of those other entrepreneurs. This dream kept me pursuing all the wrong activities, telling myself all the wrong things, and wasting years of my life planning for some magical stack of perfect conditions. All I thought was right was wrong.

Recently, I began to see that, living in this digital age, the truth is almost stupidly simple: create multiple digital products. This is a lesson I adopted from something Brian Fargo once told me. He mentioned how having a back catalog of products can help your company stay in business, because all those little purchases can add up and maintaining the low numbers of sales is almost effortless. In other words, you don’t need to pin all your hopes to a single, super awesome, needs-to-be-perfect project. Instead, you can just build a bunch of smaller, ghetto-ier products, each one scoped appropriately to what you can accomplish given your time, resources, and skills at that time. This back catalog of products works for you, however slightly, while you sleep, work, and build other products. This back catalog of valuable-yet-not-award-winning products can eventually add up to sufficient income to consider yourself “self-employed”. You can quit that job, fill up your money machine, and move to Moorea.

It may have been the case in previous generations that you truly did need a bunch of capital and manufacturing time up front. If you had information or a story to share, you would need to print and ship the books. If you wanted to help people, you’d need an office space or a substantial travel budget. In our digital age, this is no longer necessarily the case. Many products will still require partnerships with other companies but if you’re building a product that can be digitized, such as an informational product, book, movie, etc. etc. you don’t need any of that. You can consult for free via Skype, self-publish your ebook via Amazon, or upload your film or videogame to a variety of locations. Even if you do have a physical product, you can use methods such as drop-shipping, and sites such as Shopify, to automate and digitize the process. There are plenty of people who have physical product-based businesses that they manage from around the world, wherever they happen to be, using just their laptops. You don’t need a factory.

About a week ago, I committed myself to making and releasing as many products as I could in the next 4 months. If I can release even one new product a month, with an average return at $50 per sale, I would only need to sell ~20 of each product per month to make enough to comfortably live off of ($50 x 4 products x 20 = $4000). To me, that is inspiring. Not only because around 20 sales per product seems far less daunting than the 1,000+ sales I was previously imagining, but because each of these digital products would not really need input from me. Once created and uploaded, like this blog post, they’re hosted. No more effort or energy on my end to keep them up. My only investment is that weekend or two it took to make it. I could just focus my efforts on marketing the current catalog or creating the next additions to it. It’s this freedom of how I choose to spend my time that is infinitely appealing. Remember, this time is going to pass anyways, either at a job you hate or on tasks that can increase your income without limit, whenever and from wherever in the world you want to be doing them. Which would you prefer?

Now, there is a trade-off. Shooting to get these products made quickly and to get them to be valuable enough to sell, I have to make a few compromises when it comes to the “fun” of the process. For example, I can’t create and launch a quality videogame in a month of part-time development so right away the fun pursuit of game development that I’ve wanted for years now is off the table. In addition, the value I currently have within me to package up and give the world is, by definition, the things I am already good at and thus also the things that are no longer interesting. My next product, for example, is a Udemy course on writing bomb-ass cover letters. I know how to do this, I’ve helped so many other people (including a mid-life entrepreneur and tech-industry veteran change careers) and continue to do so even today. It’s something I’m better at or know more about than most people, so it is a bit of value that I can uniquely contribute to the world. However, as you can guess, it is quite dry.

As sad as it may be to admit, I think this lack of “fun” is a huge reason I never accepted this truth earlier. I want to enjoy my life day in and day out. I’ve found that I can only find fulfillment in accomplishing dreams too big for me to accomplish, so instead I choose to pursue fun. If a project or activity is not fun, I avoid or abandon it. Thus, this recent shift has been rather unnerving and a bit of a jarring transition. I’m trying hard to find the fun in this process. Have these little experimental products be my games. Have the thrill of launch and pain of rejection be my excitement. Have the steady accumulation of entrepreneurial experiences, skills, and a thicker skin be the rewards. It’s not easy, but I think it will be a worthwhile experiment. Who knows, there might even be some extra income involved.

So here goes nothing. I may not be right with this, but I clearly haven’t been right up to this point either. The consequence of failure here is quite literally the situation I currently am, so there’s no risk. The only risk is staying put or trying the same thing over and over again expecting different results. Sure, my approach may not be that sophisticated or awe-inspiring, but at least it’s simple.

Simple math.

Believe me, all is brilliant,

_Eric

P.S. Check out the song Simple Math by Manchester Orchestra.

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4 Months to Self-Employment

So about a year or so ago I came up with the goal to achieve “self-employment by 30”. In the time since then, I’ve flailed around from one idea to the next, unsuccessfully moving toward that objective. Sure, I’ve learned a lot, and even made $40 in sales off of an experiment with a cover letter writing business. Now, I’ve got about 5 months till I turn 30 so, assuming at least one month of time will be eaten up with holidays, that gives me 4 months to earn enough on my own to live off of. In just four months, I hope to have a business up and running. Ideally, it will also be running well enough to support me working on it full-time.

Now, I’m well aware that this is a challenging prospect and that more likely than not I will achieve self-employment during my 30th year or even sometime thereafter. But this truncated timeline can also be seen as an advantage, forcing me to focus on the right activities and disallowing any procrastination through inaction or “research”. I believe it was Jeff Bezos who recommends using 10x thinking, which essentially has you putting even crazier restrictions on your situation to force you into pursuing ideas and actions that will bring 10 times the result. So, if I use 10x thinking and do 80/20 analysis, I should be able to accomplish much of my objective by then, if not accomplish it entirely.

This will require me to discard a lot of emotional and egotistical baggage, not to mention unlearning many lessons and earning a new experiential education via trial and error. However, I am ready for this. Clearly, the past ~5 years of me trying it the Eric way has not worked. I’m at the point where I want a product more than I want a lifestyle. I want a good thrashing more than I want a comfortable cruise toward success. I want a systematic struggle more than I want a get-rich-quick scheme. I want to end this year with a solid foundation of skills, experiences, and–ideally–sales that I can use to build my entrepreneurial future upon.

Not my image, and of course it's cheesy.

Not my image, and of course it’s cheesy.

This is the shaky step out onto the dance floor, the fumbled greeting to a pretty girl, the trust-the-bungie leap off a bridge. Caution and comfort can be a cage if indulged for too long. I’ve fed them well. The freedom instinct still vibrates madly in the core of my being and if I want to achieve some measure of financial liberation by my next birthday, I’ll need to be bold, be lean, and always be moving. Rest not, want not. I’ll also need to remember that there is no perfection to pursue, just hypotheses and experiments. There is no safety or guarantee to find, just the confidence in your ability to thrive in any situation. There is no trick to making money, just the noble pursuit of providing as much value to other people as you can.

Four more months. Let’s do this!

– Eric Daily, September 7th, 2015