On the Deferred Life Plan
On the Deferred Life Plan
or why I quit crypto
I often get to hear about people’s deferred life plans by virtue of having worked in crypto. It usually goes something like this:
“My life’s work is to build rockets, so what I’m going to do is make 100 million dollars in the next 4 years trading cryptocurrency with my crypto hedge fund” — Sam Altman (mockingly)
A deferred life plan founder will have 2 companies in mind. The first is their dream company, which they defer. The second is an interim company, usually a SaaS or crypto startup, which they will use to afford their dream.
Every interim company has a dream company hiding behind it—a product of years of rumination and obsession.
The more obsessed you are with your dream, the clearer and more differentiated it will become, and the better you will be at communicating even a crazy idea to your users, employees, and investors. This means even seemingly delusional ideas can lead to better startups than “safe bet” interim companies, which illustrates how poor of an indicator realism can be for startup success.
The inverse is also true. If a startup sounds average, then it will likely share the same fate the other 95% of startups that eventually die. Insanity adds variance to the equation, which can sometimes play in your favour.
This is the double edged sword in the deferred life plan. What would’ve allowed your deferred startup to work is also why your interim company struggles.
As you continue to work in startups and discover the hardships that come with them, you may realise as I did that only moonshot companies could justify that level of sacrifice. There needs to be an oversized upside to warrant the destructive effect that even “easy” startups will have on your life. Given their significant chance of failure, better to have failed at something great than to have gone to war for glorified gamblers or a B2B SaaS.
Broken promises
Most crypto startups promised a world of freed financial systems. A world where Cubans, Iranians and Americans alike would have equal access to banking. Unfortunately, few did anything to improve accessibility in their products. Complicated user experiences and a culture of volatility often meant crypto was used by an even more elitist class than the traditional financial (TradFi) system.
Whereas TradFi could benefit 401k retirees and municipalities, crypto struggled to service a larger audience than degens with disposable income, a demographic that only occasionally grew by way of stimulus checks and the promises of free money from the latest memecoins.1
FinTech and crypto were different implementations of similar ideas: a modernised and fairer financial system. Their implementations differed greatly of course, in part due to the differences in the people building them.
We are still decades away from any definitive verdict on the success/failure of crypto, but the current set of incentives, founders, and investors showed a dark path ahead of broken promises. I would wager that substitutes and competing FinTech products will feast on crypto’s missed opportunities in the 3rd world as most of it continues pandering to high risk yield chasers.
Chosen ones
It’s not clear to me whether we choose ideas, or if ideas choose us, but a dynamic world favours those who act on it first, irregardless of where it came from. That is usually when they’re most relevant, but it is also then that the world can be shaped around the idea before filling its void with a substitute.
If ideas could choose us, it’s fair to assume they would try to pick those capable of bringing them to life.
There are lots of people with more money than you, but are they better candidates ? Fortunately, there is no shortage of over-funded and failed startups in the valley to remind us that funding is yet another poor indicator for future success.
Trying to make it big on an interim company ignores the fact that people will fight hand over fist to fund good ideas from the right people.
If you cannot convince investors it’s worth their money, perhaps you are the wrong person to sell this dream.
If you cannot build a small prototype to demonstrate its moonshot potential, perhaps you are the wrong engineer or designer to build this dream.
The right candidate for an idea is not likely to be the one with enough money, but instead the most qualified to handle the specific challenges associated with the vision. You are more likely to encounter those specific challenges by working on the idea at a smaller scale and early, than by building up experience in an unrelated domain.
Leap of faith
Crypto’s culture of anonymity and eagerness to be early adopters is a blessing for any 17-year old looking to build something big. But while crypto is a surprisingly meritocratic industry, it inherits most of that from the broader hacker, open-source and silicon valley communities.
That makes it a great way to make money. What it isn’t is a stepping stone towards building things that matter, or solving hard problems. Anybody is free to disagree, but I have seen countless good engineers and even better founders with a dream become pacified by crypto in this way.
If you find yourself procrastinating with the deferred life plan, which I suspect is the case for many in crypto, then the direct path is your leap of faith. The upside is that the direct path is a much faster and less expensive mistake when your initial vision is incorrect. If it doesn’t work at a small scale, it won't have worked at a larger one so long as the fundamentals are the same.
In both cases, your resources will have to run out before you realise they weren’t enough.2
I left crypto because I decided that it was time to encounter those specific challenges related to my vision, which we’ll discuss here.
Having a strong bias towards leaps of faith will usually net a better outcome. Either it works, or you will reach the bottom much faster. 3
I suspect if crypto builders cared more deeply about accessibility, more of them would work in FinTech, or take lower paying jobs in the many companies addressing remittences, developing countries, off-ramps, etc.
There are rare exceptions where this doesn’t apply. I know some people whose deferred plan involves investing personal funds, which obviously requires an interim company. You need to be honest with yourself about whether you are one of those exceptions.
A corollary to this piece of advice is: look down before taking a leap of faith, if there is a pile of dead bodies, you may first want to figure out how they got there.