In a previous post I wrote about the importance of “balance sheet” thinking vs. “income statement” thinking. The idea is to think of your career like an asset that pays dividends over time.
While most people think of their careers in terms of cash in – cash out (I work for 10 hours, you pay me for 10 hours), asset-based thinking realizes certain career investments will more than pay for themselves and are worth the delayed gratification.
When done well, your career stops looking like a ladder – slowly climbing rung after rung.
Instead it starts to look like a flywheel. Once you get it moving, it accelerates faster and faster. It might take a ton of momentum to get that first revolution going, but each subsequent revolution gets easier and easier.
It’s a very different way of thinking about your career, but one that can dramatically alter your career trajectory.
The Typical Career Progression
Payscale did a study looking at worker’s average lifetime earnings. They segmented their data out by gender, so I’m extrapolating a bit, but in general the typical career progression looks like this:
(Note: Compensation is obviously not the only variable one should consider when making career decisions. But it can often be a pretty solid directional indicator of one’s progression in their career.
You typically will make around 60% more at 30 than you did when you started. And around 45 or so you top off at 110% of your initial salary when you started. From 45-65 you will typically have an extended plateau.
Given this, you can think your career as having two phases – the Growth Phase where you’re working to get increase your worth as much as you can, and the Harvesting Phase where you reap the benefits of all the hard work you put into the first phase.
The Career Flywheel
I would submit you have two objectives in manipulating this curve.
The first is to make the slope of the Growth Phase as steep as possible. In the event you do eventually plateau, your Harvesting phase will be much more lucrative.
Even better is to avoid the plateau altogether. To have generated such momentum that you blow right past where things taper for most people and just keep on growing.
This is what the Career Flywheel can do for you – maximize your ascent, and avoid the plateau.
But how practically can you do this? How do you build your Career Flywheel?
I would submit there are four levers you can use to build your flywheel:
Let’s explore how these can work for you.
Mastery is the foundational lever. It’s the one that’s available to anyone who decides to pursue it. It’s the process of becoming really good at something.
Good can mean many things. It can simply mean possessing knowledge of a particular domain. Anyone who commits to a discipline of reading and synthesizing can pursue this.
Tony Robbins used to say spending an hour a day reading about a topic would put you in the top 1% in the world in terms of expertise around that topic. This gets magnified if you pursue a systematic approach to remembering what you read.
But to really internalize a topic, it’s helpful to actually get experience with it. This isn’t always possible (I’m learning about quantum computing right now, even though practically I won’t be getting hands on experience.) But with most disciplines it is.
I don’t believe you should wait for your boss or organization to give you opportunities to practice. If they do, amazing. But in most cases you’ll need to submit to some form of self study.
A common approach in product design circles is to do a “design a day”. They’ll identify a design challenge (a login/registration dialog, for example), and attempt to design it. They’re typically using it as an opportunity to learn the UX of a particular interface, while also learning how to implement a particular design technique.
Go on Udemy or Coursera and look for courses in the domain you’re interested in. Either take the courses directly, or use them as an outline to build your own curriculum.
The other approach is do take on side projects. It’s one of the reasons I beat the drum around working for free so much. When you think of it as an investment in your career, you no longer are worried about how much money you’re making on the project. You’re worried about getting as many reps as possible in the shortest time possible. You’re focused on your portfolio of experience, not your checking account.
I believe anyone who seriously submits themselves to a discipline of reading one hour each day, coupled with completing at least one project a week will position themselves much more successfully for the rest of their career. They’ll be able to start charging more for what they do, and pursue projects with more visibility.
They will have built the first critical leg of their flywheel.
Building a Network
The second critical step is to build a network. A strong network is the primary mechanism people use to surface new opportunities. The best people don’t have to submit resumes to job sites. Because people come to them.
Some people feel like you can’t start building a network until you’re achieved mastery. While the kinds of opportunities you’ll see will certainly be more compelling and lucrative as you get better at what you do, you can start building your network immediately.
The secret is to focus on helping people. Go above and beyond what is typically expected to find out what people need and serve them.
The people who you aspire to be like – where do they hang out? What events do they attend?
Attend those events. Get to know them. Learn what they’re trying to accomplish in their career. Be listening for ways you can help. It could be sending them a book you’ve read related to a problem they’re trying to solve. It could be an introduction. It could be an offer to volunteer some of your time (another project for your portfolio!).
Don’t play the “collect business cards” game. Set a goal to get to know one person at each event well.
Take it to another level – who are the organizers of those events? Volunteer and get involved in those organizations, whatever that looks like. Say yes to all the crappy stuff no one else wants to do.
Don’t worry about what you’ll get out of all this help you’re providing. Don’t keep a tally. I promise it pays dividend far beyond what you invest in it. It just happens in scattershot, serendipitous, almost mystical ways.
If you want to put your networking process on steroids you can leverage the 5/25/150 networking strategy my buddy uses to systematically add value to his most important relationships. It’s not for the faint of heart. But after implementing it for several years, the guy has access to literally anybody he wants at any time.
Pursuing mastery and building a network put you in a position to start pursuing the third lever of your Career Flywheel.
Create a brand
One of the unfortunate misunderstandings of the Instagram generation is the belief that you build a brand first. While there are certainly examples of people who’ve done this, I would argue it’s the exception to the rule.
More importantly, it’s a brand built on a super shaky foundation. I’ve met dozens of people over the years who seem like they are competent, only to find out there’s nothing of substance underneath all their bombast.
The right order is to pursue mastery first. THEN start talking about it. Not the other way around.
What if you don’t have the expertise yet? Is there anything you can do?
The wrong answer is to attempt to convince people you’re good at things you aren’t, or that you’ve achieved a level of success you haven’t. Don’t rent the lambo and film yourself in your garage.
Instead, my buddy Nick Seguin suggests becoming known for competencies rather than skills early on.
If you develop a reputation for being hungry and curious (which you will have by now through your pursuit of mastery and your focus on helping your fledgling network), that in itself can be a great foundation for a brand.
Being known for curiosity and hustle will start to open doors for you, which will give you chances to improve your skills and meet interesting people, who will see your drive and want to introduce you to more opportunities. And so it goes.
Once you have mastery, by all means leverage it. There are plenty of people to follow to learn how to build your brand. Gary Vaynerchuk is a great one.
The rules are fairly simple. Get clarity on your message. Identify the channels that will be most effective at sharing your message. Be consistent about creating content around your message (it’s much easier to have ideas about what to talk about if you’ve already done the work of becoming an expert).
Write. Speak at events. Create video or audio. Take an idea and tailor it to as many mediums as make sense. Engage with your followers. Give, give, give. Ask occasionally, but focus on providing value.
But please, don’t get intoxicated by the temptation to shortcut the process. That guy toiled in the aisles of wine stores for years, learning how to sell and manage and grow a business before attempting to give anyone advice about how to do it themselves.
A great personal brand can be incredibly powerful. But focus on acquiring skills. Become great at them, then talk about it. In the meantime, simply be known for your work ethic, curiosity and character.
Avoid the Plateau: Reinvest wealth
Build the first three levers and you will dramatically alter the slope of the Growth Phase of your career. You will start having more lucrative, interesting opportunities more often.
You will start building wealth. This doesn’t mean that you’ll be “wealthy”. It simply means that you will have more resources than you did previously.
This is where many people go wrong. There is a huge tendency for people’s standard of living to increase as they make more money.
It’s okay to have some increases. But just like you want to make sure you’re investing a portion of that income into retirement, saving or investing accounts, you should reinvest as much as you can back into your career. Specifically, you can invest them into the first three components of your flywheel.
This is how you bust out of the plateau.
Reinvesting your wealth into your Career Flywheel will further increase and accelerate the slope of your Growth Phase. But even more important, it has the power to delay or even permanently eliminate the plateau that you typically see in a Harvesting phase.
What are some examples of investments you can make?
Attend conferences or take higher level courses that might have been prohibitive before.
Hire a part time assistant to learn management skills and to free up your time to focus on learning.
Make capital investments to accelerate your skills – better gear, etc.
Acquire new skills you didn’t previously have.
Improving your Network
Identify higher level people that you’d love to add to your network. Figure out the conferences they attend and go to them.
Create a travel budget specifically for visiting cities where these folks live to get coffee or lunch.
Use the resources to help your network in ways that might have been prohibitive before.
Build Your Brand
Hire someone to help you scale the creation and distribution of content.
Submit speaker proposals to conferences, even if you have to pay to go to them.
Level up your website.
Get nicer cards or better clothes.
Be like Garyvee and get a videographer to follow you around all day :)
Building your Career flywheel
Start building mastery. At the same time begin to cultivate a better network. Once you actually have something interesting to say, begin to create a brand. And use the income generated from the increases in those areas to reinvest back into your career.
Most of all, be patient. Everyone’s in such a hurry to be successful immediately. As a result they flit from thing to thing, looking for the silver bullet that leads to immediate success. Life doesn’t work that way.
Your Career Flywheel isn’t a one year endeavor. Plan to spend your entire career investing in building it. And plan to constantly reinvest back into it as you start to level up.
Track your time each week. Set a goal to spend 5% or 10% or 20% of your time investing in your Career Flywheel. Get a buddy to hold yourself accountable if you need to.
Putting in the work isn’t glamorous. It isn’t always fun. It will be slow going in the beginning.
But over time you’ll build momentum. Your flywheel will start going faster and faster. Eventually the momentum will carry you with it.
In 10 years you’ll look back and be completely blown away by the progress you’ve made. And you’ll know the next 10 years will be even more incredible. Your job will become to learn how to hold on for dear life without blowing everything up.
The goal is to expose myself to as many good ideas from smart people as possible.
But over the years, memories get fuzzy. And when you read as often as I do it, jumping from one book right into another, it can be difficult to remember all the great ideas you spent so much time discovering.
And so a few years back I started to implement a system to remember everything, with help from my buddy Emerson Spartz.
It’s pretty straightforward, and requires a fair amount of organization. But the results are powerful.
Step One: Annotate.
Unless I’m reading fiction, I keep a highlighter and a pen next to me at all times. As I find passages that are interesting, I highlight them.
As I read passages that lead to thoughts of my own, I write them down in the margins. This allows me to remember not just that I thought an idea was interesting, but why.
I tend to pay particular attention to three sets of passages:
Most non-fiction books have frameworks or principles they’re attempting to explain. I make sure I highlight each of them, with any relevant action steps for implementation.
Stories are often more compelling than facts. Having good stories at your disposal allows you to explain ideas and argue positions much more persuasively.
It’s not uncommon for great books to reference other great books. These can be a great source of new ideas?—?if I see the same book pop up more than once I almost always pick it up.
Step Two: Transfer
As soon as I finish a book, I open up Evernote. I have a notebook for books, and I create a new note for the book. I transfer all my highlights and annotations, noting the page number and whether it’s a principle, story or reference.
I also have a second notebook for quotes. Any quotes I highlight I put in both the book’s note, and in their own note in my quotes notebook. I tag my quotes by theme so I can track them down later if necessary.
Sounds tedious, but it typically takes less than 20 minutes.
I’ve found that the act of typing my notes into Evernote dramatically increases the likelihood I remember the material later. But the next step makes sure of it.
Step Three: Remind
As an avid fan of GTD, I’ve come to appreciate the power of a good “tickler system”. It’s basically a process for reminding yourself to do something. Sounds simple, but it’s what makes my whole book system work.
Whenever I complete my transfer into Evernote, I create a reminder in OmniFocus to review the note a month from now. I also set it to queue up the next reminder for every six months after.
I have a reminder to review at least one book most days of the year. It takes 5 minutes or so, and I’m usually able to do it during my commute.
This is the key step. It’s allowed me to remember all the important information from books I care about. And it inevitably triggers new ideas for how I can apply the material to my current work or life situation.
The Power of Remembering
This probably sounds tedious. Perhaps it sounds like I have an OCD problem. That might be true.
But I can’t tell you how many times I’ve been in meetings trying to solve a problem and the solution has been an idea applying ideas from books I’ve read, often that I had recently reviewed again.
This process gives my brain many more “mental models” than it would otherwise have. It folds these ideas into my subconscious, where I’m able to recall and refer to them much more easily.
It allows my brain to ruminate on them in the background, to internalize how they could apply in more situations than I had originally thought when reading the material for the first time?—?perhaps more than the author even intended.
For me, it makes all the sense in the world. If I’m going to take the 5 hours to read the book, I might as well take the extra 30 minutes a year to ensure I never forget it.
Creativity is fast becoming one of the only ways to remain truly competitive in your career. And I can’t think of a better way to be more creative than to systematically increase your inputs.
P.S. This was originally sent to my Inner Circle newsletter, but got enough positive feedback I decided to publish it. Want to get my next Inner Circle? Message me on Twitter.
When I was growing up, my dad talked often about income statement thinking vs. balance sheet thinking.
Most people think of their finances like an income statement. You make income. You spend it on stuff. You make more. You spend it on stuff.
But people who understand money think about their finances like a balance sheet. They make income. They invest it into assets that earn additional income. That they turn into more assets. And so on.
Balance sheet thinking requires a mental shift. It requires delaying gratification – realizing that the investment made up front will likely pay dividends later.
Your time works exactly the same way.
Your time is an asset
Most people subconsciously think about their time like an income statement. Time in, money out. They want to get paid for every hour they work. No money, no work.
But some people think of their time is an asset. An asset that can be used to build more value over time.
These people focus on maximizing the value of their hours, not necessarily being compensated for every hour they spend.
Rather than spending their time, they invest their time.
A tale of two freelancers
Imagine Lucy and Mike both want to start a freelance design business. Neither have great portfolios yet.
Mike reads articles about how you should never work for free. That you should be paid what you’re worth.
He talks to some people for advice and decides his time is worth $50 an hour. He only takes on projects he gets paid for. At the end of the year he’s done 10 projects averaging $5,000 each.
Lucy realizes her portfolio needs to get better. She needs to get better, by working on real projects with real constraints.
She decides to spend 8 hours a week promoting the hell out of herself (obviously unpaid) and the rest doing work. If she gets paid, great. If she has unallocated time, she fills it up with work regardless of cost, even if it’s free.
End of the year, she’s done 50 projects averaging $1000 each. Many of them, particularly in the beginning, she does for free.
They make the same amount of money. Mike made more per hour worked.
But Lucy is now a better designer than Mike. She’s had 5x the opportunities to learn on real projects with real constraints. She has 5x the logos and examples to put on her website, Dribbble, etc. She has 50 customers whom she can leverage for referrals.
After 1 year, she is able to command more than $50/hour on projects. And her pipeline is much bigger. In year 2 she makes considerably more than Mike. Because of a 1 year investment of her time.
So at night I did design work for my company on my client projects. For free.
I did dozens of them, outside of my normal job responsibilities. I didn’t get paid for any of it. But I got WAY better than I would have otherwise. And eventually it became my job. In 18 months my income tripled. And it put my career on a trajectory that would have been impossible (or at least taken considerably longer) otherwise.
Most importantly, it taught me a secret. Investing your time vs. spending it creates exponentially more value in the long term. It takes longer, but not as long as you think. And the rewards far outweigh the short term costs.
It’s a secret I use to this day.
When we started Digital Intent, we charged 30k to design and build entire apps for startups (web and mobile!). To some people that might sound like a lot of money, but I promise you it isn’t. It was barely enough to pay our team. The partners made nothing.
But we got the logos. We learned how to execute on multiple projects at the same time. We learned how to sell those kinds of services, how to manage those kinds of projects, how to allocate resources. And that investment allowed us to charge progressively more.
Today the same services cost 10 times as much – and it’s still a good deal. The team got the experience to become badass at what they do. And we’ve demonstrated the ROI enough times to make it a no brainer for our clients.
If we tried to “charge what we were worth” at the outset, there’s a good chance we’d still be a 3 person company today. At a minimum I think our growth trajectory would have been considerably different.
Same thing with Founder Equity. I had experience building and selling companies, but not as a GP in a venture fund.
Almost every fund charges a 2% management fee each year and gets 20% carry when there’s an exit. Our fund charges no management fee and has no traditional carry – we own the exact same thing our investors do.
That means we’ve worked our tails off for 3 years identifying promising companies, doing diligence, serving on boards and generally trying to make ourselves as helpful as possible for our founders.
And we take zero salaries from the fund to do so. In fact, any profits from our consulting company that don’t get reinvested in the business go right into the fund.
To income statement thinkers that sounds insane. But if it works, the upside is transformational.
We don’t look like typical VCs, don’t have the normal pedigree. I don’t think we would have gotten the fund off the ground had we not been willing to put substantial skin in the game ourselves and have our unusual no-free structure. It’s only been possible because we focused on asset value, not income.
Dumb Reasons to Work For Free
There’s a subtle difference between what I’m suggesting and what most (particularly freelancers) think of when this topic comes up. In that world, it’s not unusual for the potential client to ask you to work for free, not the other way around.
They might dangle the idea of “exposure” or of follow on work if they’re happy with what you do. They might be a startup trying to convince you they’re going to be the next big thing.
Those are dumb reasons to work for free. What I’m suggesting is more strategic.
In many cases, your aspirations (your means) are insufficient to reach your goals (your ends.) Whenever that’s the case, working for free can be a strategic way to close that gap and accelerate your growth.
Most clients that are reputable and actually have the power to make things happen for you won’t ask you to do something for free. You should wary of anyone who does.
But that doesn’t mean you can’t offer it. Especially when it’s an opportunity or person you wouldn’t be able to work with otherwise.
Looked at through this lens, you’re no longer someone being taken advantage of – you’re someone using it strategically to benefit yourself.
But I’m too old / busy to work for free!
A common objection to this thinking is that it’s only relevant for younger people without responsibilities. Folks who are older, with mortgages and spouses and kids can’t possibly be expected to do this.
Candidly, that’s just horseshit.
I had an employee who was getting his MBA full time at Kellogg. He wanted to become a product manager. There was no curriculum. So he created one.
He taught himself web and mobile programming – not enough to be a developer but enough to know what is and isn’t possible.
He taught himself how to use Sketch to make prototypes, how to leverage existing UI kits to quickly communicate his ideas. He taught himself Flinto so he could prototype animations.
He flexed his new skills on projects for us, effectively volunteering to be a product manager on top of his normal responsibilities to get experience. Now he’s a fast-rising product owner at a Fortune 500 media company.
I have a former student who wanted to transition into marketing. He took it upon himself to learn paid acquisition so he could rapidly test and validate ideas for his company.
He leveraged that experience to get on the radar of the VP of marketing, who ended up offering him a job on his team. He did this while attending grad school full time, running the entrepreneurship organization, and operating his own Jiu Jitsu studio.
These two both did this on top of full time jobs and full graduate level course loads while juggling the responsibilities of a family.
I’m not suggesting it’s easy. And I don’t want to minimize the difficulties some people face in their personal lives, things I couldn’t possibly imagine. Myself and the folks I know have certainly been given healthy doses of privilege, and to suggest otherwise would be ignorant and unfair.
But for most people, I do believe it’s possible to pull this off on top of your existing responsibilities. You adjust your lifestyle. You get focused and efficient at getting things done. You make the time.
If you want to accelerate your timetable for achieving some career or entrepreneurial milestone, working for free (or making compensation contingent on success) is a counterintuitive but effective way to get there.
This doesn’t mean you always work for free, or try to charge what you’re worth. If you get paid, great. But at a minimum keep it in your back pocket. It’s far more important to get the experience, the logo, the case study, the added network, the mental models that come from doing the work.
Forget about dollars earned per hour. Think instead about % of hours spent building the asset that is your career. Your time is an asset. Spend it as such.