#16 Passion Projects for Income - Yeah or Nah?
I can’t find the post now, but I opened LinkedIn this morning to find a financial advisor (not a connection of mine) sharing an article from entrepreneur.com, which was effectively slating popular articles about ‘quitting your job and following your passion’. The author’s view was that an entrepreneur would benefit by solely concentrating their efforts on finding gaps in the market for new products or services, instead of focusing their efforts working on projects they are simply passionate about. The author noted that passion should be part of the equation when starting a new venture, in that a founder will derive determination for their project to succeed based on their passion for their family (which is a valid point). Secondly, the author noted that a founder can derive passion for his/her employee’s families too (another good point). The term frequently used throughout the article was “…someone needs to take out the trash”, implying that no one has a “passion” for this task, yet someone needs to do it as a job.
I felt like sharing my views, but I’m not into trolling around on linkedIn. I’m writing this to kick around my own views so I can reflect on them later though, and share with my network.
My initial thoughts in response to the post are below -
Thought one – A good financial advisor would advise clients to build their business slowly instead of going “all in”. I think all business literature these days recommends validating an idea with people who will actually buy your product or use your service first, before throwing a lot of your time and money at a new venture. Examples of this validation are - asking questions to potential users seeking to understand their pain points; launching a landing page and asking people to leave their contact details for when the product/service is ready as a way to gauge sales interest; and getting feedback on prototypes and samples to create minimal viable products. All of this type of work seeks to identify if a market exists without a huge capital outlay.
This thought leads to the idea that it is wise to keep a “day job” while you’re starting up, where in my opinion having passion for your project will likely be the thing that keeps you motivated to work on your venture whenever you get a spare moment outside of working hours. Someone who works a day job taking out trash for example, will have a better chance at kicking off a new business opportunity if they work on a project they are passionate about. Passion is excellent for motivation.
Thought two – One of the first rules about investing is to diversify. Again, don’t go all in at the start of an idea. Your time is just as much of an investment as your cash, so it’s a balancing act to decide where to allocate your two most valuable resources (time and money). A good financial advisor who understood their client’s skills and capabilities may recommend they allocate some of their resources to take on risk in a project they are passionate about. Risk can of course be mitigated by focused work, where passion is an excellent tool to keep energy levels high to focus on overcoming challenges. In my opinion, you should try to develop skills which enable you to manage some of your own risk in your portfolio, rather than relying solely on a professional investor to manage the majority of your financial risk for you.
Thought three – Whether we like it or not, we are all inherently lazy. We need to exert more mental effort into tasks we don’t like doing, which results in other tasks we need to perform being more difficult because we have less energy to apply to them. We’ve all experienced taking shortcuts when we’re tired. This is where the ‘taking the trash out’ seems to be such a chore for the author. My view is that when you’re highly engaged in your work, the task of taking out the trash is much easier because you haven’t been battling through your day applying mental effort to tasks you don’t enjoy. Applying yourself to work you are passionate about is an excellent way for reserving mental energy to complete tasks you don’t like doing.
Thought four. I wondered if the financial advisor was considering the role technology plays in supporting people who pursue their passions as business opportunities in this day and age? Entrepreneurs are presented with an endless suite of online tools which can automate difficult/boring tasks at very little cost. An entrepreneur can therefore focus more energy on their passion as a business opportunity now more than ever before. Surely this environment creates the type of landscape the article intends to slam, where entrepreneurs can spend more of their time focusing on niche business opportunities (to support their family and employees). Further, technology allows entrepreneurs to engage directly with niche communities who share the same passions – an excellent way to find users and buyers.
I could go on, but will end with a final thought about one of the comments a reader of the article made in the comment section. The reader raised a point about how people reflect on their time spent when they find themselves on their deathbed. The note was that people on their deathbed wished they had worked less on tasks they didn’t enjoy, and spent more time following their passions, and spending time with loved ones. It seems counter intuitive to think that doing things you’re not passionate about with people you don’t love should be the way you spend the majority of your life. I think Dr Covey made a valid point about Beginning with the End in Mind in his book 7 Habits of Highly Effective People, where he offers suggestions about how to achieve long term goals by breaking them down into manageable tasks and daily habits.
In summary, I believe that people should absolutely pursue their passions as business opportunities, but they need to be aware of their overconfidence, and other biases they will have in their ideas. Starting small, and being open to feedback from potential users/buyers and other data is a critical place to start. From a financial standpoint, I believe you should absolutely consider investing in your own projects as part of adding risk to your portfolio – however, offsetting this by investing time or money in low risk activities is a good idea for balance. Pursuing your passion as a job is less draining on your mental stamina, meaning you take less shortcuts on tasks you don’t enjoy doing in your day-to-day. Seeking advice about how online services or technology can help you automate mundane processes is worthwhile, which allows you more time to focus on what you’re good at. Finally, you just get one shot at life, is money going to be your primary driver?
Depending on circumstances, it may be best to keep a passion project as a hobby before trying to turn it into a business opportunity. However, keeping an open mind about how a passion can be translated into income allows you to take advantage of the rushes of insight you’ll have as you incubate your ideas. Root-Bernstein (1989) noted – “Innovations, by definition, are effective surprises that bring together problems, concepts, techniques and materials that were previously unrelated.” As a passionate person with an open mind, you are the one who is more likely to make connections on previously unrelated ideas to capitalise on new opportunities – others will be too busy complaining about taking out the trash.