361: How To Find What Makes You Happy (Hint: It’s Not Financial Freedom) With Steve Chou

Podcast: Download (Duration: 16:46 — 19.5MB)

Finding what makes you happy means identifying the small number of categories your life actually runs on, then working out the minimum threshold each one needs. For me there are four: wealth, mental stimulation, family, and social stimulation. Once a category clears its threshold, additional gains produce almost nothing.

In this solo episode I reflect on five years since leaving my job, including the parts that did not go smoothly and why I considered taking another job at a startup.

Below is the full framework: why scaling has a cost most people ignore, the four factors, how I currently score on each, and the one I still struggle with.

Key takeaways

• Financial freedom does not resolve everything. I considered another day job after quitting.
• Each category has a threshold. Past it, more produces diminishing returns.
• Great success comes at real cost. My most successful friends are frequently the loneliest.
• Staying small is a deliberate choice. Both businesses exceed seven figures with almost no staff.
• Quitting improved the businesses substantially, which was the clear upside.
• Family is presence rather than constant contact. Being available beats being around every minute.
• Social stimulation is my weakest area and the hardest to solve alone.
• Ego is the ongoing struggle, not money.

What actually improved after quitting my job

Having full-time hours transformed both businesses, which is the unambiguous benefit of leaving.

The list of what became possible: tablet and mobile optimization that lifted conversion rates substantially, a full store redesign, four months of rewritten email autoresponder sequences, SMS marketing, Messenger bots, a YouTube channel, an Instagram presence, tweeting several times a day, and TikTok.

The blog changed too. Longer and more comprehensive posts have performed exceptionally well, and the same pattern holds on YouTube.

None of that would have happened while working full time.

Why I deliberately do not scale

I run both businesses with almost no staff by choice, because scaling adds stress without adding happiness.

For My Wife Quit Her Job I have one assistant who edits podcasts and videos. I run the online store course myself, answer my own email, help students personally, write my own posts, and produce all podcast, video, and TikTok content.

Noah Kagan asked me directly at FinCon why I do not scale up and hire people to handle everything. My honest answer was that I do not want the added stress.

Two specific reasons sit behind that. Scaling requires a team, and managing different personalities while keeping everyone motivated has been a genuine source of stress even with three employees at Bumblebee Linens.

The second is resilience. Everything stays simple while the business is small, and in the worst case I could run all of it alone without juggling moving parts.

The underlying math is diminishing returns. Both businesses generate far more than I spend, so more money is welcome and would not change how I feel.

What great success actually costs

The pattern I keep noticing across successful entrepreneurs is that the more successful someone is, the lonelier and less happy they tend to be.

Most of my genuinely successful friends have sacrificed their social and family lives to grow their businesses.

The comparison pressure is real for me specifically. As a Stanford undergrad I was a Mayfield Fellow, a group of twelve students a year given resources and venture capital mentorship, and many alumni have had eight, nine, and ten figure exits.

Kevin Systrom of Instagram is the most prominent. Another Mayfield friend, Steph Hannon, was CTO of Hillary Clinton’s presidential campaign.

At our annual retreats I feel inferior, because I sell handkerchiefs and digital courses while others build companies that change how the world works.

The questions I have to keep asking: is the prestige worth it, are the sacrifices justified, and would a large company actually make me happier.

The 4 factors framework

Four categories determine whether I feel fulfilled, and each has a minimum threshold rather than a maximum.

• Wealth. Can I afford what I need, support my family, and do what I want?
• Mental stimulation. Is the work interesting, and am I using my brain fully?
• Family. Am I spending enough time with my wife and kids to be genuinely part of their lives?
• Social stimulation. Am I around interesting people who share my goals and challenge me?

The critical insight is the threshold effect. Going out with friends two or three times a week satisfies my social needs, and going out more often does not improve anything. The same holds for every category.

Happiness comes from balancing these to match your specific personality rather than maximizing any one of them.

Wealth: 4.5 out of 5

I do not consider myself rich and I have more than enough to do whatever I want.

The practical test: I do not think about the price of a nice restaurant, an extended cruise in a two-story suite, or NBA finals tickets.

As long as I avoid anything reckless, income comfortably covers expenses and everything I want to do.

This is the category where diminishing returns are most obvious to me. More money would be welcome and would not register as more happiness.

The plan is continuing to grow both businesses steadily rather than aggressively.

Mental stimulation: 4 out of 5

My mind needs constant stimulation, which is a large part of why I stayed a hardware engineering director as long as I did.

Designing microprocessors requires real brain power, and I worked alongside people from MIT, Stanford, and Berkeley. At one point roughly 80% of the company held advanced degrees from top programs, and I genuinely appreciated working with people smarter than me.

Selling handkerchiefs, blogging, podcasting, YouTube, and teaching do not fully satisfy that need.

I fill the gap with software. After quitting I quietly worked on side projects, and today I write all my own plugins, which keeps this category adequately fed.

Family: 5 out of 5

Family is the reason I quit, and it is the only category where I score full marks.

My kids are at an age where they still want to hang out with me, which made the tradeoff obvious: sacrifice some mental stimulation for a real role in their lives rather than sitting in an office all day.

The honest part is that I am not a parent who can spend every minute with his children, because they drive me nuts.

My actual goal is presence rather than constant contact. I am around to help with homework, to play when they want to play, and to attend soccer, volleyball, and basketball games.

I am not with them every minute. I am there when they need me.

Social stimulation: 3 out of 5

This is the category I am still struggling with, and the one quitting my job made worse.

At my day job I was in constant contact with brilliant people who pushed me to be better because I knew they were smarter than me. That stopped abruptly.

After quitting I found myself sitting alone in front of a computer. The absence of smart, driven people around me is the main reason I seriously considered joining another startup, even though I knew returning to work was the wrong choice.

Everything here now requires deliberate effort. I actively arrange meetups with other entrepreneurs locally and attend as many relevant conferences as I can.

Starting Seller Summit was partly about filling this gap for myself as much as for anyone attending.

COVID made it considerably harder.

What I am actually struggling with

The real ongoing difficulty is keeping my ego in check rather than anything financial.

I know I could achieve considerably more in business by pushing hard, and part of me wants to be wildly successful and known for something impactful.

My mother is the comparison that sits underneath that. She is a microbiologist who discovered a cure for a rare disease, which is a different category of accomplishment than anything I am doing.

Three out of four categories met is a genuinely good position. Knowing what makes you happy is most of the work, and the rest is execution.

Frequently asked questions

Does financial freedom make you happy?

Not by itself. After quitting my job I had the money and still had a void significant enough that I considered joining another startup. Wealth is one of four categories, and once it clears a threshold, additional income produces diminishing returns.

What are the four factors of happiness?

Wealth, mental stimulation, family, and social stimulation. Each has a minimum threshold rather than a maximum, so the goal is balancing them to match your personality rather than maximizing any single one.

Why not scale a profitable business?

Scaling requires a team, and managing personalities while keeping people motivated creates real stress. A small business stays simple and resilient, and if the revenue already exceeds what you spend, the additional money does not translate into additional happiness.

Does business success make people unhappy?

It frequently comes at a real cost. Most of the highly successful entrepreneurs I know have sacrificed their social and family lives, and the pattern I notice is that greater success often correlates with more loneliness.

How much time should you spend with your kids?

Enough to be genuinely present rather than constantly around. My approach is being available for homework, playing when they want to play, and attending their games, without spending every minute together.

How do you replace workplace social interaction?

Deliberately. Leaving a job removes daily contact with smart, driven people, and nothing replaces it automatically. I arrange meetups with local entrepreneurs, attend conferences, and started my own event partly to solve this for myself.

How do you find your own happiness thresholds?

Score yourself out of five in each category and notice where additional effort stops improving how you feel. Two or three social outings a week satisfies me completely, and more produces nothing, which tells me where that threshold sits.