I ran into an entrepreneur friend of mine this morning while I was working at Starbucks. He told me that his company had just moved their money from Silicon Valley Bank to a bigger bank a few days ago as they were shopping for better rates. If they hadn’t moved their money, his company would have run into payroll issues.
Now the government is stepping in to make sure everyone gets their deposit back. However, a lot of people’s careers have been impacted by the whole Silicon Valley Bank fiasco, and there are some important career lessons for all of us to learn from it.
First, a black swan event can take away everything in a matter of hours or days. Imagine you’re one of the 8,500 Silicon Valley Bank employees. All of your equities (RSUs and stock option grants) are now worth nothing. You’re completely wiped out. Many of these employees will eventually lose their jobs. Some of them have worked at the same company for 10, 15, or even 20 years. Their entire professional identity is built around Silicon Valley Bank. It’s a devastating blow financially and professionally.
For me, I like to advise my clients not to stay at the same company for too long. Three to five years seems to be the right duration, and you should move on to different organizations to diversify your risk and learn new skills. This way, even if a black swan event happens to your employer, you still have other experiences to lean on.
Second, it’s extremely risky to have all of your eggs in one basket. If you only have one single source of income, and that is your paycheck from your employer, it’s risky. If your company goes under or you’re laid off, it’s a very stressful situation. Many people are going through this process right now.
Never put yourself and your family at the mercy of a single paycheck. It’s simply too risky. Have a side hustle and develop a portfolio career.
Third, for ambitious folks who want to move into senior management, it’s important for you to be aware of the stress and risks associated with executive level positions. I’m not trying to discourage anyone from becoming VPs or above, but a lot of people only see the higher status and more money, without realizing the stress and risk associated with these roles. Here is a credible blog post about potential criminal charges against Silicon Valley Bank executives. With more power comes more responsibility. As an executive in a public company, one needs to be extremely cautious and play by the rules.