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Should You Start a Business? Use This Test | Deep Questions with Cal Newport


Chapters

0:0 Cal's intro
0:44 Money acting as an indicator of value
2:10 Cal talks about Derek Sivers

Transcript

All right, our first question comes from H, who asks, "How do I get over fear of starting a business? I've always wanted to be entrepreneurial to maximize autonomy over my life and alignment of what I do in my career with my values, but I have a lack of confidence in my personal skills or any domain expertise.

And more than that, I'm very, very scared of the risk of entrepreneurism. Do you have any advice?" Well, H, the right advice for you, I think, can be found in my book, "So Good They Can't Ignore You." And in that book, I introduced the idea, which we've talked about on the show before, of money acting as a neutral indicator of value.

It's a term that I borrowed from the entrepreneur, Derek Sivers. Now, the concept here is the way you de-risk a change in your career, especially a change, let's say, from a steady paycheck job to an entrepreneurial vision, is that you look to see if you can make money on the new thing.

You don't ask people, "Is this a good idea?" You don't ask people, "Do you think I should go out on my own and start this business?" You don't just look to your gut and say, "What's my passion or what do I feel like doing?" You instead, on the side, start doing to a reduced degree the thing you're considering and see if people will give you money.

Because here's the thing, it costs me nothing to tell you something's a good idea. It costs me nothing to compliment you. It costs me nothing to get you fired up about going big and betting on yourself. That costs me nothing. And I'll just do that. Why not? I'm a nice guy.

I don't want to be mean to you, but you want my money. That's different. People are different about that. They're not going to give you their money unless they actually value what they're getting. And so Derek Sivers says, "Use money as a neutral indicator value." It's a way of evaluating, "Is this business idea good?

Can I get clients? Will they pay me? Can I sell these things?" Derek Sivers used this before he left his job as an A&R executive to become a full-time musician. "Can I make enough money off gigs on the side to replace my salary? Then I will quit the A&R job." And when he left his job as a musician to start a online music company, CD Baby, he ran it on the side until he was making enough money to support him.

And then he quit touring to work on the company. So if you're really, really worried, let that worry be your motivation to use this strategy. Get a specific idea. Run it on the side. See if you can make money. And if you're making enough money to live off of, then you won't have the fear.

Or at least your fear will be greatly diminished. And if you're not making enough money to live on, that's a great signal. That means don't go quit your job. Don't go try to do this new thing. There be dragons. I'm surprised how often people skip this step because they don't want the answer.

They love the romance of doing something different. They love the romance of what life would be like if they didn't have a boss. But they don't want to confront the reality that their idea might not be that good, that people might not actually pay them, they might not actually make a living.

So they avoid this step because they don't want an obstacle to the thing that they want to be true. And I think it's a very dangerous way to go about career shifts. So H, try what you want to do. See if you get paid for it. If you don't, try something else.

If you do, your fear should be pretty diminished.