Compound interest can work just as well for your career as it does for your bank account — Quartz at Work

There is a (probably apocryphal) quote attributed to Albert Einstein that goes like this:

“Compound interest is the eighth wonder of the world. Whoever understands it, earns it… whoever doesn’t understand it…pays it.

We’ve all heard of the power of compound interest as it applies to something like our retirement account. But there’s another place where you can use a similar concept to improve your life: your career.

Most career advice will tell you to do the big things first. Resign! Drop out of school! Dream as big as possible! Sky is the limit!

What if I told you that some of the most successful people in the world didn’t start out that way at all?

Instead, most of them started small. They piled small wins (and even losses) on top of each other. They treated their careers like bank accounts that could hold not only money, but also skills, experiences, and connections.

And by collecting these elements over a period of years, they built a vast array of resources that could be combined to help them work on exponentially larger opportunities over time.

My co-founder of the first company I started, Justin, is a perfect example.

If you were to visit him today, you would open the door to a 5,000 square foot warehouse he rented in Brooklyn. Inside, you would see a gigantic robotic arm with a seat attached. Perhaps you would like to sit in the seat, put on virtual reality glasses and be instantly transported to a virtual world where you can move around in three dimensions.

Justin set it all up himself: he got the warehouse, he bought the arm, he hired a team to set it up, and he built a content studio to create Pixar-quality 3D experiences for the path. He wants to replace theme parks with him. It’s a huge sight.

But how could Justin have done all this? In 2012, while we were both in college, Justin and I started a small business called Firefly. He did something boring. It was small. It was the opposite of 3D VR robot arm. The product we built allowed someone to show their browser window to a friend without requiring a download or installation.

Simple. Small. But useful. And from the moment we started it, we’ve heard tons of comments like this:

“Why are you working on this? It seems so small?

“This is a feature, not a product”

“B2B is boring, why not do something more interesting? »

But we did it anyway.

And after a year, we were making about $10,000 in revenue per month. Not bad for two kids in college, right?

But we still have the same questions:

“Why not do something bigger?”

“Aren’t you ambitious?

We still continued to work on it. Fast forward another year and we had it quadrupled, to over $40,000 in revenue per month, with just the two of us working on it, plus a few part-timers.

That’s when a big public company came in and bought us.

After that, Justin no longer needed to work on anything small. He could take his compound career interest from his last venture and turn it into something much bigger.

During his time at Firefly, he had become an excellent programmer and had worked on very difficult and sometimes tedious problems. At the time, he was using those skills to create a better screen-sharing product. But in his new venture, he used them to create the codebase that synchronized the robot arm and the VR headset, so that when you moved through 3D space, you also moved through physical space.

Likewise, at Firefly, he became adept at introducing our product and telling our story to potential customers. He used these skills and his track record of successfully exiting a public company to help him recruit world-class designers and 3D animators, even though he had no previous experience in the entertainment industry.

And, perhaps most importantly, no one would give Justin money to build his vision. So he financed the whole thing himself with the proceeds from the sale of Firefly.

Alright, you might say. But what about someone I heard about? How about someone with an even bigger vision? How about an Elon Musk?

Well, believe it or not, Elon hasn’t started building rockets and electric cars either.

According to the biography Elon Musk: Tesla, SpaceX and the quest for a fantastic future one of Musk’s first ventures was a door-to-door Easter egg sale in his neighborhood. It doesn’t get much smaller than that. But Musk obviously didn’t stop there. After learning to program at age 12, he wrote a video game in BASIC called Blastair and sold it to a magazine for $500. In college, he ran what was effectively an “unlicensed speakeasy” on campus. He and his friends rented an empty 10-bedroom house and threw big parties there every weekend. That’s how he paid for his studies.

It wasn’t until he did all of that, and probably hundreds of other things we’ve never heard of, that he turned his professional interest into what would become his first big hit: Zip2.

If even Musk had tried to launch SpaceX right after graduating from college, he would have failed. He didn’t have the money, he didn’t have the skills, and he didn’t have the connections to make all of this happen.

He needed preparation, and so do you.

So how can you put this idea into action today?

Well, first of all, get inspired to go out and do Something. No matter how small. If you’ve put off starting a business, writing a book, or creating a podcast because you couldn’t find anything wholesale enough yet, let that be your excuse for picking an idea and following it. Even if that business, or that book, or that podcast doesn’t work, it doesn’t matter. Because a made up career means it’s not about what you do today. It’s about what you’re going to earn in five years.

Second, let compounding be your excuse for to end everything you build. If you’re working on a side project part-time, it can be incredibly easy to drop what you’re doing in the middle of the project.

It’s not big enough could you tell yourself. Or, It’s not the right thing.

Get that kind of thinking out of your head.

It doesn’t matter if it’s the right thing. You don’t because it’s going to be huge. You do this because you’re going to transfer compound career interest to the next thing and then the next thing until you find the thing that is the good thing.

Finally, if you’re doing something small, don’t feel bad about it. You can keep your day job and work on your own projects part-time. Have a little patience. To do work. Even if it’s small and ugly.

If you keep going without giving up, you will benefit from the most powerful force in the universe: compound interest.

Dan Shipper is the author of the upcoming illustrated short story How To Make Recess Last Forever.

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