Risk / Reward

A couple of years ago, I came across a tough decision about something very dear to me — my company.

I remember the very first day I thought of becoming an entrepreneur. It was my 28th birthday, and I had had enough of working for some corporation doing nothing to advance the world to the best of my ability and capability. I needed to take the best out of my potential; working as a tiny cog in a vast machine wasn’t going to cut it.

The 3-year rollercoaster ride after that decision is a separate story. Let’s discuss about today. Today I have achieved my 28th birthday wish. I’m the CEO of my own company. We constantly provide solutions that help industries, and I can proudly say that I’m a huge part of that machine, if not the central part. However, all the pride, self-satisfaction, and feeling of importance have shaken up a bit lately due to an offer I received.

Although I have been satisfied with what I do by being an entrepreneur, I cannot say the same for the financial return I received from that. I got out of a reasonably large software organization at the age of 28 and eventually ended up in the CEO position of a startup with a marginally higher salary than I had. After that, for 3 years, I didn’t have the time or need to look at the industry standard salary for my experience and qualifications. I was swamped building up my company, working 18 hours a day, every day. My wife and I lived a tough life, managing paycheck to paycheck. I couldn’t afford any luxuries, including at least a good vacation for my wife and me. We cut down our grocery spending from $50 to $30 because every penny counted. Our savings were in the negatives. My loving wife would save penny by penny for months towards an emergency fund. But one car breakdown would wash them clean, and we had to start from 0 again.

I knew the stock holding I had on the company was not worth a penny. Because,
a). We were a solutions company, and we didn’t have any worthwhile assets in terms of the products we owned.
b). Valuation companies in Sri Lanka are so corrupt that no investor would believe any valuation you do.
c). Sri Lanka was a very small market that the chance of us selling our company in the future or going public was very thin.

I actually was starting to question my value because I see Mercedes everywhere when I get on the road, and I was not seeing any way I could afford one with the current phase.

Then came this opportunity for me and my CTO. It was from one of our foreign clients, whom we have known closely for around 5 years. He was planning to set up a software team in Sri Lanka, and he wanted us to lead the team. I would get a tremendous experience working with him because he was doing solutions for some big clients all around the world; and on top of that, the pay was more than 3 times higher than I am earning now in my company. So… what would you do? Can you really put a price on your dreams?

Yes… Yes, you can. I remember a quote saying, “You might like eating pizza. But no one would pay you to do so”. People put too much value on passions and dreams that they forget to look around the real world. It’s great if you have a passion, but you got to make damn sure that your passion aligns with the requirements of the real world. Otherwise, you’ll end up very passionate, self-fulfilled, but very hungry.

I would really like to run my own organization on my own terms and be happy about the things I do for my society. But if Sri Lanka doesn’t need just another Financial Solutions Startup, you need to face reality and alter your plans accordingly.

In hindsight now, it was a brilliant decision at the perfect time because Sri Lanka became “officially” bankrupt in 2022 while crippling a lot of financial organizations and putting a lot of startups 6 feet down. The odds would’ve been definitely against us.

It doesn’t matter if my organization was the noblest one there is if I cannot provide the best for my family financially. I still have the dream I had when I was 28. However, it’s a bit altered now. I would earn money and make myself financially strong. It will be an added benefit if I get to learn more about entrepreneurship while I’m doing that (because I have a strong suspicion that my company’s mediocre return had a lot to do with my (lack of) capabilities rather than other factors). When I’m strong enough to take a high risk of a startup, I will get into startups again. Maybe within a few years, maybe never. Who knows…

Most teenagers think High Risk = High Reward. So they pour everything they’ve got into a very high-risk business and then expect to be able to buy a private luxury yacht within a few years. But you’ve got to understand that High Risk doesn’t always give you High Rewards. Almost always, you’re going to get meager returns. That’s actually the very definition of “High-Risk Investments.” The “Risk/Reward Balance Scale” you’ve all seen is a deception.

So, the moral of the story is this. No matter how dear it is to you,

Put a price tag on your dreams… Now, before it’s too late…