February 11, 2019

Why I quit a $500K job at Amazon to work for myself


  1. 19

    My advice is to be careful - Just like the pay increases and extrinsic motivation wears off - so does this new exciting freedom of "being an entrepreneur". It's exciting to read and write articles and plan and listen to Gary Vee... It's fucking hard to start a business. I left Microsoft two years ago for the same reasons you did. I didn't make 500k, but I made a shit ton for a 23 year old with no family and expenses. I was excited for months to "be independent". And then I realized how hard it is to succeed as an entrepreneur. My first two projects flopped and I blew through my savings in six months. For the next year and a half I have been working my ass off to build my consulting business to the point where I earn enough that I can spend another 40 hours a week on my venture. At one point, I was even a bit depressed. That comes from someone who has never really been sad before and would never in a million years have thought that would happen two years ago.

    My advice to you - find a real problem. Don't just build something. Spend the next six months talking to everyone you know figuring out their biggest problems. The ones they have frequently, that they would happily pay you for. Good luck man - this path is not for the faint of heart.

    1. 6

      I echo @akyker20. 4 years ago, I had more money than I ever thought I'd have at age 25 so I jumped head first into starting Strengthen.io. We [I] ran out of bootstrapping cash and ended up having to Airbnb my house and racking up credit cards to keep things going until we made enough to support my living expenses. Even then, my co-founder (CTO) had to find another job to support our work which slowed things down and I negotiated a partnership at a local gym where we could sell our software for corporate wellness programs. To make it work, I had to wake up at 4:30 am M-F to service the corporate wellness clients we landed through the gym and then work with more people into the evenings.

      I don't regret doing any of that one bit, but I probably should have found a full-time job that was synergistic to what we're doing with Strengthen. Hell, I would have been better off learning to be a health coach and just working with people IRL instead of building "cool tech."

      Focusing on solving problems is used all the time but it's so true.

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        Thanks for sharing. Let me explain how I'm thinking about it:

        I've already visualized not pulling this off. I've put a threshold on my savings account and if I breach it I'll go get a job. And I'm fine with that. It doesn't need to be the same job, or the same quality of work, or the same compensation. To protect myself from financial ruin all I need is a job that covers my expenses, and I'm confident I'd find one quickly. If this doesn't work, I would have had a shot and our lifestyle wouldn't have regressed. My downside is limited to just diminishing a good part of my savings, and if that were to happen I'll consider that an advance from my retirement savings and I'd make up for it later.

    2. 2

      Thanks for your comment. I appreciate that you shared your story.

      The approach I've taken was to negatively visualize not being able to pull this off. That was very important for me to take the plunge. I have no expectations or goals. I'm just going to try to make ends meet with a small independent business and if I don't manage for whatever reason (run out of money, get bored, find it too hard, etc), I'll just go back on the job market. I promised my family that our lifestyle won't change, and if our savings drop below a certain threshold I'll get a job and make sure our expenses are covered. For catastrophic stuff I got abundant insurance (life, disability, health).

      I'm taking your advice though. I intend to put something in the market quickly and then iterate/change as I learn from the response. I like the marketing and business side as much as the tech, so I'm looking forward to experiment. What gives me confidence is that I don't need a lot to cover my expenses. But I'm cognizant that it's an experiment.

      I'll keep documenting it as it happens.

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        Have you considered buying an already-functioning business instead? In retrospect, I wish I had gone that route when I had the option.

        1. 1

          Yes. I follow FE International [1] and occasionally inquire about some of the businesses for sale. There were a few that I seriously considered, but at the end nothing so far was worth pursuing.

          I'm currently holding that as a Plan B option. I have set 2 thresholds for my savings. If my savings drop below the first threshold, I'll start to pursue this option very strongly. It's still preferable to going back on the job market. The other lower threshold would make me go to the job market :)

          The reason I'm not trying to buy a business immediately is that it's hard to find something that's a great fit for me and in a field that I understand very well. I prefer giving a shot trying something myself first, catered to my strengths and what I know I like doing. I also suspect it would be very distracting if I tried to do that while I also had another business in a field that I don't fully understand.

          [1] https://feinternational.com

      2. 1

        I promised my family that our lifestyle won't change

        Hm... I hope your cost of living is not that high.

        It's more healthy and sustainable to have your family on board with you even if that means cutting some luxuries. If they are only on board "if nothing changes for them" they aren't really supporting you and you may get demotivated along the way.

        1. 3

          I managed to save a lot, mostly with some lucky investments and a high salary in the last 3 years. I'll be starting this with $1M in liquid savings, but I would have done this even if I had a third of that.

          My cost of living is not very low, about $150K/year. I live a comfortable life in a nice neighborhood in Seattle. I did consider moving somewhere cheaper, but my family weren't enthusiastic about it, and it wouldn't have made a huge different anyway.

          For the curious, here's my monthly expenses:

          $5K    mortgage, property tax, HOA, home insurance
          
          $1.2K  health insurance (family of 4: $7K/$14K deductible)
          
          $500   life, disability, umbrella, auto insurance
          
          $800   utilities
          
          $2K    home services: nanny, sitter, cleaning
          
          $800   school / preschool and kids activities
          
          $2K    groceries and other essentials, etc
          1. 1

            Thanks for the details! So you have ~6 years of runaway, seems good.

            I've quit with ~4 years of runaway. It's been only 6 months and I'm already starting to feel the need to make some real money, not because I need to, but because of the opportunity cost of not making 😄

            I suppose you may pass through something similar as well.

            1. 1

              Yes, psychologically it's hard to see negative numbers accumulate in the bank account. The thing that really gave me confidence in taking the plunge is that the runway can extend quickly even if initially I make very little.

              For example, adding just +$250 of linear profit growth per month and starting from zero would get to a $100K/year run-rate after 34 months. I'm not diminishing the difficulty in adding $250/month of net profit, but it's not intractable in a global marketplace online. And there's obviously the upside of doing much better.

    3. 1

      Great advice!

  2. 4

    Software is the only industry where somebody making half a million dollars a year with a great working environment and work life balance will say "nope, not good enough".

    1. 1

      But there is so much more to life than just money. I don't think that mindset is limited to just the software industry. Maybe the correlation is that the success of many software companies has led to an influx of young professionals who far exceed their "dream" salary targets much, much earlier in life than before.

      1. 2

        Of course, there is more to life than money, but half a million dollars per year is a life-changing amount of money. 5-10 years of that salary and you are done, retired, over.

        It's so wild people like the OP would choose the stress of starting a company over just working for a little while longer and then being free to do whatever they wanted for the next 50 years.

  3. 2

    I'm curious, what was your career progression before and during your time at Amazon? Can you share any more details about your background?

    1. 2

      I joined Amazon as an SDE-1 in Nov 2010. I already had about 4 years experience in software dev, but only 1.5 years were after college. In April 2012 I got promoted to SDE-2, and in Sep 2014 I got promoted to SDE-3. I was practically assured I would have been promoted to a principal engineer this year. (In fact I was put up for the promotion at the end of last year, but I asked for it to be postponed.)

      My comp progression was as follows, starting from 2011: $75K, $120K, $150K, $185K, $230K, $390K, $470K, $510K.

      The growth in comp from 2016 to 2018 was mostly from stock appreciation. If the stock didn't grow I would have made ~380K in the last 3 years. Here's my last 3 year-end pay stubs for those curious: https://imgur.com/a/EgIVQln

      I never focused on promotions or career growth. I never asked my manager what I needed to do to get promoted, or tried to do things to help my career. I never asked for a raise except in 2016 when I got a competing offer from another company and Amazon matched it. (That's how I got that big jump from 230K to 390K in 2016.)

      1. 1

        Thanks Daniel. The hardest thing about doing your own thing is ... doing everything alone. And having a supportive network. Good luck! I've done a lot on YouTube/Kickstarter/App Store, but I'm making a change this year.

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          I agree. Definitely the thing that I’ll miss most from my job is the collaboration with others. I’m not worried about my drive to create something, but I suspect it’s more satisfying tackling challenges with someone else.

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            What tools/technologies are you planning to leverage?

  4. 1

    Congratulations! I walked an exceedingly similar path a few years ago. Am back in the corp world (for now!) - I wish you the best of luck and my one piece of advice is fail fast. We were in an industry with multi-month (sometimes multi-year) contract negotiations - not a great spot for a startup - coupled with a co-founder that I fell out with and did not trust.

    Happy to talk and share my experiences if it helps you.

  5. 1

    I’d also second the comments about reducing your personal overhead and getting your partner on board 100%.

    I don’t know what your at-home situation is, but the way you wrote it sounds like your spouse may not be totally on board. That is a serious threat to your success! Like others below said - your business’s success and your financial well-being depend on your ability to manage not only your head, but your finances. Thinking long-term would lead you to conclude that living in a nice apartment instead of a $5k/mo place you own, which reduces your burn rate, gives you more “runway”. Prioritize your business over your lifestyle today and hopefully you’ll be able to live a much better lifestyle down the road!

    You sound like an intelligent guy, and I bet you’ll be recruiting $500k/yr earners to work for you in no time! :-) Will be looking forward to your next article.

    1. 1

      Thank you for your message. My family is onboard, but I'm doing my best to ensure that this experiment with my life doesn't affect them in any way. I did seriously consider moving about 40 miles away to a place where housing costs $300/sq-ft rather than $550 where I live now. But I noticed that my family wasn't very excited about moving schools and losing contact with friends, so I let that go. Now if the circumstances were different, I might have done something about my expenses, but I don't think I need to. With the way things are I'm going to try to make this work without regressing on my standard of living.

      1. 1

        I applaud you. You want to take care of your family. You’re a great leader in that respect.

        Just be prepared to make sacrifices to get what you truly want. There’s almost always a trade off; time, money, quality of life, etc. It’s as important to know why you quit your job as it is to know how you rank your priorities in life.

        You’d be surprised what you really NEED to be happy. It’s a lot less than we think. Stuff is nice, but it’s also distracting. :-) I’m still rooting for you, @dvassallo!

  6. 1

    My only advice to you: first thing you need to do is learn how to budget and how to live a frugal life, your future business and your life depends on it.

    Going from $500k a year to $0 a year is very, VERY challenging, so be EXTREMELY careful with your new financial situation. Seriously.

    I was in a similar position about 4 years ago and I had to learn this lesson the hard way, but it was definitely the most important thing I ever learned in my life.

    So enjoy your new freedom responsibly, and good luck!

  7. 1

    lol. my friend Adam wrote basically same article, and it went viral on medium. https://medium.com/@adamjh/why-i-left-my-254-895-pm-role-at-microsoft-a91c75db37ad

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      Wow. I know no one will believe me, but I swear I didn't see that before! Thanks for sharing!

      1. 1

        I believe you. :).

        It is an amazing journey that many of us decide to embark on, that is why it resonates with many of us.

  8. 1

    Good luck and it will be interesting to follow your journey. I personally made that jump 7 years ago and have never regretted it.

    I’d second the comment about considering purchasing a business off the shelf as that may give you a head start in terms of traffic and potentially customers. One thing you could also consider is once you have identified the space you want to move into identify what other companies / individuals are in that space, look for the ones that have gone a little stagnant and approach them to see if any are interested in selling, again that could give you a head start against starting from scratch.

    Whatever you decide to do - good luck and enjoy the ride !

  9. 1

    I really liked the story. Must say a great article

  10. 1

    Great things never come from comfort zones as they say Daniel!. Good on you for taking the plunge, very interesting read.

    I'm sure whatever you choose to go onto will be successful - you seem to have done exceptionally well at Amazon.

    Do you have ideas for your next venture or are you looking to test several things out beforehand?.

    Looking forward to seeing how your story goes from here....

    1. 1

      Thank you!

      I don't have any concrete ideas yet, but likely something in the dev tools field. I'm going to spend a month or two exploring what I should try first. My general plan is to put something on the market ASAP, and then iterate or change course depending on the market feedback. My focus is on finding something that would eventually break even with my family's expenses. Luckily I have some savings so I don't need it to cover my expenses immediately. I'm okay with it growing slowly and taking a few years to fully break even. What's important is that I recognize early if that's going to happen before my savings run out :)

  11. 1

    Daniel, congratulations! It's the moment your life starts.

    Thanks for writing this. Will share with my co-founder who's still chained.

  12. 1

    Thats a great story and a top start Daniel. Really hope it goes well.

    I quit my day job twice to go independent. 2nd time around so far so good. You sound like you don't need a boatload of advice. So just one thing. My advice to anyone who was like me, ie a developer who thinks they can go it alone, is to look after the money side of things.

    I did not do that well the first time around and was flat out romantic about money. The second time around I am totally reformed. Nothing like a crash landing to reform a guy. Try and spend at least 50% of your time on non-coding business matters.

  13. 1

    Thanks for sharing your story! It's always cool to read about somebody's endeavor (someday I will share mine). G'luck.

  14. 1

    Good luck Daniel! Welcome to the independent's group of people 😉

  15. 1

    We'll be rooting for you! 🙌