opportunity cost

opportunity cost during decision making stays on my mind, especially in the context of career and entrepreneurship. as a reminder, the formal definition of opportunity cost is:

the loss of potential gain from other alternatives when one alternative is chosen.

this past year, i have been trying to build several projects with the hope of them being spun up into an eventual startup or separate stream of income from my regular day job.

i tend to work in optimums, (either i go for the best, or it's fine to just settle with where i am) meaning it is hard to avoid the opportunity cost mindset. i am constantly looking for the next best thing, and the fear sits on my mind that i might tie my hands to something that is ostensibly detrimental.

the biggest problem with this mindset is you stunt your own growth by never taking action and always waiting for the perfect opportunity to come. in reality, the best choice may be to just work with what you have now and see what happens. discounting an idea because of opportunity cost can be paralyzing.

through my father's early career trajectory, he reminded me that we rarely know where life will lead. the only job he was able to get out of college was a sales job; here he mastered dealing with objections from cold calls. it wasn't what he always wanted, but he made the most of it and learned as much as he could. when he later interviewed for a property manager role, he had no relevant experience, but his skill at handling objections impressed them enough to hire him.

similarly, notable people like jim simons (the "quant king") had quite the unconventional career (at the time) before becoming a hedge fund legend. he went from being a math professor, to a codebreaker, to wandering into the shoes of one of the most profitable hedge fund managers.

steve jobs is an even better example. he dropped out of reed college and sat in on a calligraphy course, which he later said taught him the beauty of typography, spacing, and proportion, which was a direct influence on apple's products.

i look back on the times i shut down ideas because of the opportunity cost, and i see that there was no real cost. the result of foregoing ideas has kept me in the same position i was in before. this is a lesson to myself: i do not need to see the entire map, just take the next step.

instead of thinking of the opportunity cost of an action, think about the opportunity cost of not taking an action.