#21: The Cockroach Mindset 🪳
staying resilient in choppy waters
These days feel exceptionally turbulent, like the ground beneath us is unstable. In just the past couple weeks, there are signs of things getting worse before they start getting better. Tech companies like Lyft, Stripe, Twitter, and Meta have laid off thousands of employees [1]. Rocket Mortgage, a home mortgage loan provider, reported their Q3 net income being down 93% compared to last year [2]. FTX, one of the largest crypto exchanges, was on the brink of insolvency and is now officially filing for bankruptcy [3]. 37% of SMBs were unable to pay full rent in October [4]. Consumer credit card debt is at all time high of $930B with younger Americans having the highest delinquency rates [5]. Rather than dig into each of these events in isolation, I think it’s more useful to understand what’s going on at a system level. People are losing their jobs, no one is buying a home anymore, crypto is having another bubble pop, and people can’t pay their bills. Even though the laid off employees at these tech companies often make a cushy six-figure salary, there will be second-order ripple effects; think about the nannies, hairdressers, restaurant staff, and baristas that rely on the discretionary spending of these well-paid professionals. Unfortunately, I predict things are still starting to unravel and in the short-term there’s more choppy waters ahead. Hopefully I’m wrong, but “Hope is not a strategy.” Looking back, being laid off in May 2020 due to COVID helped me develop a resilient mindset so although I’ve never lived through a recession as an adult, I have at least some experiences to reflect on. To put it bluntly, summer of 2020 was an exceptionally shitty time to be looking for a job with just 10 months of full-time work experience while being cooped up inside. I moved back home in northern California where it gets too hot to go outside during the summer and of course, we were still in a pandemic with no clear end in sight. I waded through chronic feelings of dread, helplessness, uncertainty, and having gone through that is precisely why I feel relatively calm today even amidst all the chaos.
Never let a good crisis go to waste - Winston Churchill
The Cockroach Mindset
After a couple minutes of googling, it’s not conclusive that cockroaches have adapted to extreme conditions and can actually withstand nuclear blasts, but there is this popularized belief that cockroaches are resilient. I mean, just look at this still from Wall-E where the only living creature left is a cockroach:
The cockroach metaphor resonates with me because it’s all about staying low the ground, tuning out the noise, and focusing on survival.
This week I started attending the Small Bets course run by Daniel Vassallo which focuses on similar themes of diversified bets and resiliency in the form of self-employment. I had already begun thinking about embracing the cockroach mindset before this week and then coincidentally realized that I’m not the only one that’s thought of this concept before:
Although I’m still employed at a full-time job, the company-of-one concept resonates with me because you can’t really get laid off if you’re your own boss. Although I don’t have a clear path to self-employment (yet), I’ve already found myself agreeing with principles like embracing randomness in the world, trying new things, and focusing on survival (in this course it means staying self-employed). In a world that’s constantly changing, removing the need to depend on a single company or boss for livelihood is for sure one way to stay in the game. But even if you don’t go down the self-employed path, embracing the cockroach mentality will help you navigate the (highly probable) recession and stay psychologically resilient - which I would argue is actually a bigger hurdle than the practical challenges that tough times bring.
Separating the Psychological from the Practical
Just how bad jobs can be broken down into shit jobs (not enjoyable, but crucial for society) and bullshit jobs (not enjoyable or necessary), I think it’s important to decouple the stresses that a layoff, market downturn, or recession can bring. There’s the practical aspect of making sure you have enough money to weather the storm and then there’s the psychological challenge of managing uncertainty, feeling secure, and in general not worrying too much. There’s plenty of finance gurus online preaching to young people to stop drinking $7 lattes and how to navigate a recession from a personal finance angle so I’ll focus more on the psychological part - which again, is what I think is harder to regulate (in the homeostasis sense).
Divorcing your sense of self-worth from your job
Most people, including me, have one full-time job. In the future, with remote work and platforms like Upwork, maybe we’ll all have multiple part-time jobs, but for now, we’re mostly stuck with relying on one source of income to pay all the bills. The same drive that led to straights As, joining a professional club in college and get a high-paying job at a prestigious firm may lead to vulnerabilities and lead us to over-index on attaching our sense of self-worth to our job. It’s important to care about what you do and if you love your work that’s great (probably better than hating your job). However, instability arises when you’ve spent so much time working a job that you haven’t spent any time cultivating passions outside this singular, professional pursuit.
Just like the professional athlete who goes down a negative spiral of emotions when they have a season-ending injury, a hard-working software engineer, consultant, lawyer, banker can face a similar identity crisis if they were to ever have their job title stripped from their sense of self. A quick pulse check on this is to think about something that’s not on your LinkedIn or resume that you could give an unprepared 30 minute lightning talk on. It could be about anything - yoga, flying airplanes, or video games. Is there some thing that comes to mind immediately or is it hard to find a topic? When interviewing for a job, we spend hours and hours in multiple rounds of interviews talking about our accomplishments and skills as it relates to the job. What would the interview of your life look like?
Imagine the worse case scenario
Visualizing “the negative” or what Tim Ferris calls fear setting is useful to stay comfortable in discomfort. When there’s so much uncertainty ahead, our minds tend to wander in all possible directions and in some cases, the turmoil from constantly worrying about what could go wrong can actually be more stressful than experiencing the negative outcome itself. By doing a one-time negative visualization, we bookend the infinite set of possible futures to a somewhat bounded range of possibilities. Imagining in vivid detail of what could actually go wrong also helps to remove some of the irrational worries that creep into our minds like never finding a job ever again. The result is knowing that even in the worse case, we’ll come out the other side being okay.
Understand risk and opportunity
A few weeks ago, I was eating dinner at a vegan pan-Asian restaurant in Nolita with two twenty-something friends and we were talking about how our generation is obsessed with optionality, freedom, and flexibility. It manifests in career, dating, where to live, and even trivial things like where to eat. B said “I think our generation confuses risk and opportunity cost.” Too often, choosing to commit to one path feels risky not because there’s a high probability of failure, but because it means shutting ourselves away from all the other possibilities. In the context of building a resilient 🪳 mindset, I think it’s important to recognize opportunities - not just spot opportunities, but also being able to pounce on them when they appear. Deciding to make a big change like change career paths or move to a different city can sometimes feel like a big risk. Perhaps we feel that way since we are so used to optimizing for maximum optionality and preserving all possible outcomes. We’re expecting to make big moves while our index finger hovers over the metaphorical Undo button, but actually, it doesn’t exist.
In Game of Thrones, Littlefinger says “Chaos isn’t a pit. Chaos is a ladder.” I know he isn’t exactly role model material, so here’s a more benevolent, tangible example: During the ‘08 financial crisis, millions of people lost their jobs, but in the same time period, startups like Uber, Airbnb, and Dropbox were founded. They were able to hire and rapidly scale because the job market was favorable for startups. I predict a similar story will unfold with companies like Meta laying off 11,000 people and billions of VC dollars waiting to be deployed. It’s never been a better time to be a startup founder (so long you’re building a real profitable business). Now you can actually hire people instead of being out-bid by Big Tech.
What I’m doing personally
On a practical level, I’m saving up more cash by investing less and spending less. I’m cooking more at home and making my own coffee, but that’s only a matter of a few bucks. The more impactful decisions are things like staying flexible by not signing a lease and skiing at nearby mountains instead of going on a bougie Japan or Europe ski trip. While it would be pretty sick to float through some Japow and enjoy a warm plate of Japanese curry on the mountain, it would also be a lot more expensive. By deliberately choosing the less expensive path, I’m able to save without feeling like I’m making any serious sacrifices.
Although I don’t know exactly where I’m going to live next year, I have a list of travel destinations sorted by cost so I were to travel somewhere, I’d visit the more affordable places first, like Thailand or Mexico. When the time comes, if I feel comfortable with my situation, then I would love to spend more time in New York City which seems to be magnetizing all the young, ambitious people trying to build and create.
It certainly is a possibility that I get laid off so I’ve been hedging against that by spending free time on other interests which could lead to future opportunities. I’ve been exploring more in the realm of housing, travel, and climate mostly by reading a ton. I’ve also started to coach a couple friends generally on career, wellness, and performance, which all sort of blend together. Lastly, I’m thinking about other ways to make money, starting with signing up to take calls for an expert network.
Most importantly though, I’ve been prepping my mind to be comfortable in the discomfort, like floating in choppy ocean waters and staying calm through the chaos. I know that if I need to drastically drop my expenses, I’ll be happy continuing to eat oatmeal everyday (I happily do this already lol) and in the absolute worse case, I enjoy the outdoors and have backpacking experience, so I would just live in the woods for a bit ($0 rent) or maybe do something crazy like hike the PCT. I’m not kidding - I think is a totally viable (and fun) path for me to take.
Closing thoughts
Based on responses to this tweet, most people think the present situation is nowhere near as bad to the dot-com bubble popping so it’s possible this is just a market correction, but I’d rather not take the risk. There’s a quite few signs already that things are going to get worse with all the layoffs, credit card debt, and businesses unable to make rent. Staying resilient and being able to weather the storm is only half the battle. When so much is changing at a rapid pace, opportunities are bound to appear. In 2009, after the entire economy collapsed, my previous manager opted out of the job market and got his MBA. When times are tough, it might seem counterintuitive to voluntarily leave your job, but he viewed the recession as an opportunity to invest in himself.
In a recession, the job market sours which reduces the value of working a standard full-time job because even if you don’t get laid off, there’s less hiring, promotions, and fun offsites. That in turn lifts the relative appeal of all other alternatives: going to grad school, taking a sabbatical, pursuing creative projects, traveling the world, raising a baby.
The first half to navigating adversity is being able to survive by having enough savings and staying psychologically bendy. It’s a prerequisite to be level-headed and have slack (free time and free mind space) so that you can understand the realm of possibilities. The second half is understanding risk and knowing when to pounce on an opportunity.
I should caveat that I’m still working on all this myself. People preach to focus only on what you can control, but I still find myself scrolling through Blind to get intel on whether I’m still gonna have a job next week and refreshing Twitter to see what’s the latest. It feels like the road is getting bumpier, going from smooth buttery pavement to cobblestone to off-road rocks and dirt and now is the perfect time to upgrade from dinky electric scooter to a 4x4 with plenty of suspension and fat tires.
Footnotes
[1] Layoffs in tech
[2] Rocket Mortgage net income down 93% YoY