No, optionality isn’t what you want

Before we start, one note. The essay below was originally something I wrote for myself to distill my thoughts around this concept. It is not a critique nor is it advice for anyone other than myself.

The “financialization” of culture that John Luttig analyzes in his article and is often portrayed in high tech/finance, is when you take financial concepts (leverage, optionality, etc.) and apply them to life. Although cross discipline applications can open up “adjacent possibilities,” they only go so far, and can oftentimes lead you astray.

Where this is seen most is in career advice.

“Take the job that will give you the most optionality.”

“Keep your head down until you have saved enough to go it on your own.”

And on, and on, and on.

In Mihir Desai HBS piece on the trouble with career optionality as a goal, he posits that pursuing career optionality (see consulting, banking, MBA, etc.) as a means to take future risks, turns out to have the opposite effect. As you continue to aggregate credentials, savings, and company logos on your resume, you become more risk averse, not less.

Imagine an undergraduate with a passion for food, but instead of starting her own food truck, she opts for a job at a big consulting firm as it provides her with utmost optionality in terms of savings and future career paths. She tells herself that as soon as she makes Senior Manager or has $x in the bank, she’ll finally have the cushion to start that food-truck and leave the corporate jockeying to the next cohort.

She is what Desai refers to as lottery ticket buyers, continually buying optionality through jobs and credentials, with the illusion that one day they’ll leave it all behind to do meaningful work.

The problem with this strategy, if she truly wishes to start a food truck, is that in life, more optionality begets more optionality to the point where leaving all that optionality prevents you from ever taking risks. (see: loss aversion).

The personal impact is clear, but a point not often discussed, is that this culture of career optionality that is prevalent across millennials also has a massive macro impact on the future of the economy.​

Continuing the theme of financialization, the US economy was built by individuals seeking entrepreneurial Alpha, not optionality.

They took on massive risks, and many of them failed. But they took those risks in stride, while building the world we live in today.

The shift towards a focus on career optionality is happening in the tech ecosystem, with more people wanting to be VCs than Entrepreneurs.

With our generation increasingly seeking security (not hedging for future risks) via career optionality, never putting their “skin in the game,” we are at risk of winding up with a homogenous culture and a stagnant economy.

What the financialization of culture has done to our society is that we forget that life is not a financial instrument and it does not pay off like one.

In finance, buying an option can completely hedge your risk exposure to a certain underlying asset, meaning you have complete knowledge of your total downside.

However, in life, there are unseen risks (your boss doesn’t like you, your firm takes on Enron as a customer, you never see your family, etc.) that can never be fully hedged against.

So before pursuing a path of optionality out of the belief that it will eliminate your downside risk, while offering the opportunity to take advantage of the asymmetric upside when it comes along, expose yourself to the idea that you’ll never be able to predict the randomness of life.

Often a career of gathering optionality turns out to leave you at the end of your path with a bunch of options, but no more time.

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