M&Ms: Experience Is No Moat
How relying on experience alone can let you down on the 96th edition.
Last week I started thewith my friends Daniel Vassallo and Chris Wong, we’ve only sent out the first issue so far, but 4,585 people have signed up.
If you are interested in Small Bets, side projects, and independent income streams, I think you will like this. It will be 100% free, and I’d love to have you in there.
I know being subscribed to a lot of newsletters can bring fatigue, but I promise we will never send you junk.
Now let’s get into tonight’s essay.
Why Experience Is No Moat
Experience is incredibly important but, at the same time, greatly overrated.
Experience is important because you need it to get your foot in the door, get the title you want, and get the money you need. But it's overrated because it's no source of competitive advantage.
For example, my engineering friend Davie has over two decades of experience and recently wanted to change roles. His experience with old and modern technologies is good, and his fundamentals are solid.
And not surprisingly, with all of that experience, nearly every firm he applied to invited him in for an interview.
You won't believe what happened next.
After proving to them he knew his stuff, all those firms looked at all that experience and made him offers.
No, that's a joke and a lie.
Davie looking for a new role is true, but he didn't land anywhere near all the roles he interviewed for. Davie landed one offer out of the seven firms he interviewed with.
I told Davie that the value of his experience had now reached the point of diminishing returns. He didn't like hearing that, but he could see it was true.
In fact, experience can eventually become a disadvantage. There are a lot of articles on ageism in tech out there, so I will keep that out of scope for this article. But one reason a firm may favor a less experienced person is that they have to pay a lot less. The difference in salary between a junior and a Staff+ Engineer can be hundreds of thousands of dollars a year.
So I told my friend Davie that you could no longer rely on experience alone. You need to find a new source of competitive advantage to stand out.
One durable way to stand out is to layer on additional skills. A skill that is deceptively harder to layer on is being a great communicator. Proving that you can communicate well publically through writing can build a nice moat around your career.
It's a good career moat because despite knowing that writing online and sharing ideas is good, most people won't do it. For most people, the barriers are psychological; I know because it took me well over a decade to get over my own hang-ups.
Warren Buffet said that if others know your secrets and still can't easily copy you, that's a moat.
It takes time to build a written public body of work. But a public body of work layered on top of good experience can be a strong competitive advantage. And the reusable assets produced out of that can be a moat around more than just your current career. For many, that work can be a stepping stone to a different career.
I told Davie that if writing all the time is not your thing, try building some side projects. But don't just put code that runs nowhere in Github repos that none might see.
Treat your side projects like Small Bets so that you can make a few dollars too.
Nothing communicates "I know what I am doing" and proves credibility in a capitalist society other than people paying you a few dollars for what you built. And if the small bets really work out, you might no longer need to compete for engineering jobs at all.
But even if your small bets fail and don't generate much money, at the very least, you will build up a diverse set of experiences and exposure to new domains. That experience can allow you to master the transition to new domains and new things.
Of course, saying that experience alone is no moat isn't entirely true either.
Back when I was at SunGard, we had this product called GMI, written in COBOL and ran on mainframes. And GMI had cornered over ninety percent of the trade market across the big banks. COBOL, the programming language, was invented in 1959. And finding developers that knew GMI flavor of COBOL and the insides of GMI was nearly impossible for SunGard. So the folks that knew those two things were regularly called out of retirement to help with massive multi-million dollar projects. So those devs had found a moat with experience alone.
And I'll never forget when one of the software developers who knew COBOL and GMI passed away in his 70s, one of my colleagues said, "this is a very sad day; he was only a puppy by GMI standards."
But that sort of experience as a competitive advantage has immense risks. What if you pick the wrong tech?
So I will tell you what I told Davie, there are advantages you can layer on to make yourself anti-fragile, but experience alone is rarely enough.
Three Tweets: Real Estate and Remote Work are still not resolved.
This a fascinating data point with lots of potential second-order effects for the real estate market.
And the volatility in rates continues with no end in sight.
In my opinion, Adam is quite on the money with this Tweet.
Even with the forced return to office mandates, where they can get it, a lot of people still prefer remote work.
And the ramifications of all that are still not priced into the economy.
One Article: Cattle Not Pets
If you still haven’t read our first essay in theI highly recommend it.
It's about how I lived as a kid and how in many ways, I am headed back to that way of living as an adult.
A Small Update From Me:
I am running a webinar on Newsletters with my friend Chris Wong next week, on Tuesday, March 7th, at 2:00 EST.
Normally this is a private webinar that Chris and I got paid to give to the Small Bets Community.
But thanks to the Small Bets community, it is now totally free and open to the public.
Of course, this has one downside.
So far, 339 have signed up. And there is no question that Chris and I have some great stuff to share.
But as an awkward and introverted engineer, this makes me a little nervous. This will be, by far, the biggest public webinar we have run.
Anyway, happy to have you in there if you are interested in newsletters. With 300+ people already in there, a few more friends won’t hurt.
As always, thank you for reading.
P.S. you can reply to this email; it will get to me, and I will read it.
wow that is awesome. congrats on the enthusiastic response to your new co-venture. It’s an awesome theme! I’m in too!
“Warren Buffet said that if others know your secrets and still can't easily copy you, that's a moat.” -- the best and simplest definition of them all. Right on the money. Great piece, Louie. And I really look forward to your newsletter workshop (signed in the other day).