Brimstone Lark

Introduction

This post highlights the financial archetypes which are available to players in the capitalist system and attempts to elucidate the tradeoffs between them. Modeling the benefits of any lifestyle is deeply subjective and individual. As a person who is thinking about what kind of life and financial profile I want to have, my own preferences and biases may find their way into this analysis. I’ll try to avoid this as much as possible.

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The archetypes

1. Corporate Drones
2. Tech / Startup Hoppers
3. Entrepreneurs
4. Mini Private Equity Fund Managers
5. Content Creators
6. Gig workers & Freelancers

My takeaway from all this thinking is the following: capitalist paths are non-linear – one archetype develops into another based on the stage of one’s ‘career’. If you want money, aim to be the Entrepreneur. If you want freedom, aim to be the Mini Private Equity Fund Manager, Content Creator, or Gig Worker / Freelancer depending on your skillset and how much money you want. On your path to those aims, don’t be a Corporate Drone unless it is high total compensation or you’re learning something you can’t learn elsewhere. Instead, be a Tech / Startup Hopper, since the financial profile is more attractive. Once you have the skills and experience you need, develop into the other archetypes. If possible, find a way to become a Content Creator as an optional way to de-risk the transition into your ideal archetype.

Corporate Drones

The defining feature of this archetype is that they trade their time for money with little to no probability of meaningful upside risk. These people earn a salary in return for essentially deleting ~40 hours per week, ~50 weeks per year and giving that time to a corporation (between 30 – 40% of your post-school, pre-retirement waking life depending on how much you sleep). Naturally this calculus doesn’t account for feelings of passion and the emotional attachment people can develop towards their work (which in this calculus, would decrease the ‘deletion’ factor to something between 0 and 1 where 0 means you love what you do so much that not a single hour of work is seen as a trade).

Benefits:

• Predictable lifestyle impact: The predictability of time required means that people can build enjoyable lives in the time they don’t spend working and generally do not have to worry about work encroaching on their hobbies and time with family. If you care about free weekends and don’t mind giving up Monday – Thursday, consider being a corporate drone.
• Predictable income: As a corporate drone you sign a contract that says, “Do X for us and we’ll give you $Y”. There is usually a near guarantee of small increases in your time / money conversion rate over time (raises) as you grow in tenure & become more skilled at your job (promotions). Consistent raises are a great inflation hedge, and provide another layer in terms of planning larger future expenses.
• Power: On a long enough time horizon at the right firm, a significant level of power can be attained which is not feasible in other archetypes. If you want to be a VP at Starbucks, your best bet is to trade your time for money at Starbucks (or an equivalent company) and climb the ranks until you get there.
• Social comfort: ~60% of the US working age population is a full time employee¹. Layer in all the messaging from the culture sphere and pressure from your corporate drone parents, and it becomes very easy to feel like you’re doing the ‘right’ thing by having a good, well paying job.
• Learning: It is unlikely that you’ll be able to immediately jump into any of the other archetypes. You need something to offer the world first. Being a corporate drone is the easiest way to pick up the experience you’ll need to transition into more lucrative, freeing archetypes. Indeed, being a corporate drone is frequently the only way to get certain knowledge (e.g., of B2B sales).

Downsides:

• Time lost: 40 hours per week almost the entire year is really quite a lot. Its very easy to lose track of time and one day realize that almost 2 years have passed and your life hasn’t changed hardly at all. If you want things to change, this is dangerous.
• Lack of flexibility: Predictability’s evil cousin. As a corporate drone you know how much you need to work when and for the most part, where you need to work. You are constrained within that construct.
• Fixed earning: Because you have a salary, it is generally the case that even if you work harder or smarter, you’re unlikely to earn more money. In this way, your outputs (money) are not tied to your inputs (hours / effort / efficiency) because your earning rate is fixed.

Exceptions:

• There are corporate jobs where your inputs are tied non-linearly to your outputs, such as sales, traders, or other commission based jobs.

Takeaways:

• Unless you’re in it for the mission or don’t care about money, this archetype typically doesn’t make sense for the long term unless your job function is high total compensation. The reason for this is that you’re likely getting a low pay to effort to freedom ratio compared to other archetypes. For people with fewer skills that can be used for the other archetypes, being a corporate drone can be an effective way to gather experience.

Tech / Startup Hoppers

This archetype is very similar to the corporate drone except that there is a built in feature which creates additional upside risk: equity. Part of the contract at many startups is that you get a small portion of ownership in the company when you sign with them. This ownership typically vests a little bit at a time over four years. Startup hoppers can leave their company after a year with the equity which has partially vested and if the company appreciates in value, the startup hopper benefits even when she isn’t working at the company. Because of this, startup hoppers are part wage earner, and part investor. This automatic diversification of cashflows is extremely powerful.

Benefits

• Predictability: Fundamentally, you’re still an employee of a corporation and are generally subject to most of the same predictability and power benefits as the corporate drone.
• Moderate upside: As an equity holder, there’s the chance that the company takes off and becomes extremely valuable. (An amazing example, here)

Downsides

• Lack of stability: Unlike larger corporations, startups may fail. You may find yourself out of the job, with no income, holding worthless equity. Moreover, your day to day may be volatile given how quickly startups change. I’ve been at younger companies who have gone through restructurings, where my job description has changed in a matter of days. Some may find this enjoyable, some may see this volatility as opportunities.
• Moderate upside: Equity allocations for employees is usually quite small. The more employees the company has, the less equity you get.

Exceptions

• Many tech companies, even large ones such as Facebook, Apple, and Amazon will provide equity in their compensation plans. You still get equity, resulting in additional upside, but because the companies are more mature, the equity is unlikely to appreciate in value by an extreme amount.

Takeaways:

• The earlier stage that you go, the more equity you receive and the more risky that equity is. This means greater upside but also greater probability of receiving nothing. The beauty of working at a startup is that you can select the stage you want based on your risk profile to maximize your return.

Entrepreneurs

This archetype is characterized by a maximal amount of upside risk and minimal predictable income. This archetype can be hard to pin down in later stages, since if the company is successful your work profile ends up looking a lot like a late stage corporate drone (VP, CEO, etc.). The early stage entrepreneur does not trade their time for wages, but are instead working for free in order to increase the value of their equity. Under certain conditions someone will buy this equity from the founder, resulting in a multiplied payout.

Benefits

• Upside: This is perhaps the only archetype where you can walk away with hundreds of millions or even billions of dollars. This is because you invest your time and energy into improving the $ / share of the business you own and over time, generate liquidity at a higher $ / share.
• Power: Because the entrepreneur starts with nothing, anyone they hire will either report into them or be their peer. Successful entrepreneurs are alluring – if you’ve spent any time in Silicon Valley or those circles, you’ll know how much mimetic desire is attached to this archetype.
• Flexibility: You don’t need to ask someone for permission if you want to go and work from Hawai’i for three months out of the year.

Downsides

• Limited flexibility: You may not need to ask for permission to work from Hawai’i, but if you do, your team may be upset, or worse, incapable. Your effectiveness in increasing the value of your business is in your hands – your flexibility is limited by this.
• No income: Because the entrepreneur optimizes the equity value of their company, it may not be feasible to pay yourself a wage. As a result you may have to rely on reserves.
• High risk: There’s a very high probability that any new venture will fail – all of the invested time and capital could be lost. Depending on how much leverage the entrepreneur takes (be it social or monetary), downside is not capped at zero. This is in contrast to the startup hopper which has no obligation to investors or financers.

Exceptions

• The benefit of Power (above) means little if the company fails.
• The downside of No income (above) is mitigated at later stages, when you can pay yourself a salary.

Takeaways:

• The high risk high reward nature of being an entrepreneur can be tamed depending on the type of business you start. For example, if you own a convenience store, some may call you an entrepreneur, but the above will not apply. You can construct an optimal profile of benefits and downsides by selecting the right market to start your business in.

Mini PE Fund Managers (MPEFM)

Much like the entrepreneur, this archetype is defined by a lack of wage earning. The Mini PE fund manager, like the entrepreneur invests their time into a business. However, instead of attempting to maximize the value of their equity, the instead try to maximize the size and consistency of income. By building systems that earn money that require minimal labor on their part, it is possible for the MPEFM to enjoy the predictability of the corporate drone and the flexibility of the entrepreneur.

Benefits

• (Eventually) Flexibility & Predictability: Initially, creating a stable business takes legwork and requires overcoming challenges. However once a stable business is stood up, operations can likely be outsourced or automated. The result is low effort cashflows that you can use to pay yourself. Individuals like Sam Parr and Shaan Puri have popularized the idea of investing time and money into cash-flowing business to support lifestyles.
• Selective, unbounded upside: Whereas you negotiate a salary with a company when you enter a labor agreement with them, the MPEFM harvests the cashflows they generate from their business. Their upside is a function of the success of the business and therefor unbounded. At the far end of the spectrum the MPEFM ends up looking like a later stage entrepreneur or corporate drone.

Downsides

• Barriers to entry: Opportunities here frequently require high amounts of initial capital to start with – you either buy a commodity in high volume to lower COGS and resell for margin, outsource the development of some software product, franchise a business, or micro-acquire an existing business which likely requires capital to run. All of these things typically require startup capital.
• Medium to high risk: Like the entrepreneur, the MPEFM is at risk of investing their time and money into a business that ultimately folds. Depending on how much leverage the MPEFM takes, downside may not be capped at zero.

Exceptions

• In the early stages, you probably look a lot more like the entrepreneur while you’re a) trying to build a sustainable business and b) doing most of the work yourself,

Takeaways:

• This archetype closely resembles that of the entrepreneur in what the day to day may look like. Their objectives and financial profiles however, are different. While the entrepreneur seeks an exit multiple, the MPEFM seeks free cash flow. Like the entrepreneur, the benefits and downsides can be scaled depending on the market you enter.

Content Creators

There is a massive degree of variance within this archetype owing to variance in scale and medium. Movie directors have a very different profile than TikTok influencers. The true power of this archetype is the ability to pursue Authentic Inspiration. However, I’ll focus on the more accessible, boring version of the archetype since I think it may be more relevant to today’s capitalist players. These Content Creators look like the corporate drone except instead of selling time for money at a discount to your employer, you sell your time directly to customers at a multiple, thereby capturing all of the upside (less anything that middlemen take). These people are empowered by the internet’s gift of nearly zero cost of information distribution and are successful when they:

• Produce quality content (be it writing, art, videos, Tik Toks, etc.)
• Are skilled in getting their content in front of folks (marketing, advertising, algo optimization, SEO, branding, etc.) and
• Can monetize on that content in some way shape or form (affiliate marketing, advertising, paywalls, etc.).

The most effective Content Creators are those who leverage their following as native marketing for some additional product or service, thereby becoming some permutation of an entrepreneur with a competitive advantage in distribution.

Benefits:

• Flexibility: The successful Content Creator can shape their lives in many different ways because they can leverage their base into any other form of business. This means they can transition into the MPEFM, Entrepreneur, or Gig worker and decide how hard they want to work. During the development stage of this archetype, they are similarly flexible, given they may live any life that allows them to meet the above conditions of success.
• Unbounded upside: The Content Creator can assume the upside profile of the MPEFM, Entrepreneur, or Gig worker. Therefore, their maximal upside is the same as the maximum of any of those archetypes. That said, the ceteris paribus description looks a lot more stable (see the financial profile Scott Alexander’s blog).
• Creative: This is non traditional work. Instead of thinking purely about how to a) do your job well (corporate drone) b) how to increase enterprise value (entrepreneur) or c) how to improve quality cashflows (MPEFM), the Content Creator can focus on producing entertaining, informative, or otherwise consumable content for people. There is not as much freedom as a creative Gig worker (e.g., musician), but there is certainly more than the other archetypes. Under the right conditions, you may be able to harness.

Downsides:

• Low predictability: It is somewhat of a toss up whether or not you will develop a strong following which is necessary for this archetype to work. You may have an idea for content that people will enjoy consuming, but you might be wrong and/or people might not be interested in paying for it.
• Medium risk: The risk to the content creator is wasted time and energy plus any money spent on distribution. It takes time to build up a following, which means it is hard to know at any given time if you should continue your efforts or if your content needs to change.

Takeaways:

• There are two reasons why this archetype is so powerful. 1) Success in developing a following creates the optionality to transition into any other archetype with lower risk and 2) Content Creators have the opportunity to be creative.

Gig Workers / Freelancers (G/F)

G/F are people who make their money in short bursts for fulfilling immediate needs. For example, someone who is extremely good at guitar may be asked to play at a concert or weekly gig, they will be compensated for their time and talents at a rate of:

 income = (how much people like you) * (number of gigs)

The same is true for Freelancers who charge for the project at a rate which is correlated to how skilled they are. Income for the G/F archetype is driven largely by their rate per gig, given that each gig takes time (which is limited). Improving the rate per gig is not a simple task and requires creativity as well as hard work

Benefits:

• Upside: Exorbitant pay rates are possible for G/F depending on your demand. For example, some artists get paid millions of dollars to produce a single piece – some consultants get paid hundreds of dollars per hour because people believe their time is worth that much.
• Creativity: This is one of the only archetype which allows one to be paid for Authentic Inspiration – this is only true for artists -not freelancers such as website developers, which are essentially corporate drones with a flexible rate and autonomy over their project choice).
• Autonomy: G/F can decide which gigs they want to take. This means that if they want to take 6 months off and surf in Bali, they can. It also means that if there is a client or gig that seems like an unworthy hassle, they don’t need to accept it.

Downsides:

• Hard work: One can’t immediately charge immense rates for their work. They need to put in the legwork for generating demand over time. This often entails working for free to get your name out there, or creatively branding yourself to increase virality.

Takeaways:

• This archetype involves a fundamentally different financial equation than the others. You trade time for money (predictable) but your rate is set by you (upside). It also allows you to determine how many ‘gigs’ (engagements, projects, etc.) you want to do (flexibility). Moreover, depending on your line of work, you can be truly creative. If you can command high rates and convince people you are worth it while doing creative work you are authentically inspired to do, this is an incredible path.

Footnotes

1. Numerator / Denominator