The Engineer Who Walked Away from $500K to Bet Small and Win Big

In early 2019, Daniel Vassallo did something that made his family, friends, and colleagues question his sanity. He walked away from a $511,000 annual salary at Amazon.

Not because he was burned out. Not because he hated his job. Not because he'd been treated poorly.

He left because every promotion felt hollow within a week. Because hitting $100K, then $200K, then $500K in compensation brought the same fleeting dopamine rush that wore off as quickly as it came. Because he realized that chasing external validation—promotions, raises, recognition—was a treadmill that would never satisfy him.

"I would be delusional to think that earning $1M, or $10M would suddenly make it different," Vassallo wrote in his now-famous blog post explaining his departure.

For eight years at Amazon, Vassallo had been the model employee. He joined as an entry-level developer and rocketed up the ranks, earning two promotions in his first 3.5 years to reach senior engineer. A third promotion to principal engineer was practically guaranteed if he stayed. His work-life balance was solid—40 hours a week. His reputation within the company was sterling. He was leading the most important project in his department's history.

By every conventional metric, he had won the game.

But winning didn't feel like winning anymore.

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What Vassallo discovered was something many high-achievers learn too late: success in a corporate structure comes with an invisible price tag—your freedom.

In his early years at Amazon, his motivation was "off the charts." He worked with one other person on an internal tool with minimal oversight. They could decide what to work on, how to work on it, and when to ship updates. The freedom was intoxicating.

But as his career progressed, that freedom evaporated. More stakeholders meant more opinions to balance. More responsibilities meant less autonomy. Complex organizational politics replaced simple problems and clear solutions. He was always working on somebody else's terms, navigating an increasingly complicated maze of goals, stakeholders, and restrictions.

The final straw wasn't a specific incident or bad quarter. It was a simple thought experiment: "What kind of work would I do if I had to do it forever?"

The answer wasn't what he was doing at Amazon.

So with $1 million in liquid savings—enough to fund five years of expenses—Vassallo took the leap. He quit his job with no concrete business plan, no safety net job lined up, and no guarantee of success.

What happened next would redefine how thousands of entrepreneurs think about building businesses.

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Vassallo's first move after leaving Amazon was exactly what most tech entrepreneurs would do: he started building a SaaS product called Userbase, a tool for creating secure, encrypted web applications.

Six months in, reality hit hard. Despite a strong launch, Userbase was generating minimal revenue. His runway was limited. Anxiety spiked. The dream was starting to look like a nightmare.

Most founders in this position double down. They "see it through" for another six to twelve months, burning through savings while hoping for a breakthrough. They go all-in on the one big bet.

Vassallo did the opposite.

He completely reframed his goal from "build a billion-dollar company" to "remain self-employed." And with that shift came a radical new strategy: small bets.

The concept was simple but counterintuitive. Instead of spending months or years building one ambitious project, create many small, quick projects with:
- Minimal time investment (measured in hours or weeks, not months)
- Low downside if they fail
- High potential upside if they succeed
- The ability to stack on top of each other

Think of it as venture capital investing applied to personal projects. VCs know most investments will fail, so they make many bets knowing just one big winner can cover all the losses. Vassallo applied the same logic to his work.

His first small bet came from a simple observation: he'd spent years at Amazon working with AWS. Why not share what he knew?

In under a month, he wrote a 173-page ebook with former colleague Josh Pschorr called "The Good Parts of AWS." No fancy production. No lengthy editing process. Just a straightforward brain dump of everything he'd learned about which AWS services actually matter.

He priced it at $65 and launched it on Christmas Day, 2019.

Within 14 days, it made $45,000. Total earnings would eventually exceed $140,000 from over 7,800 sales.

The entire project took about 160 hours of work.

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With his Twitter following growing rapidly—from 150 to 24,000 followers in 14 months—Vassallo noticed people asking how he'd built such an engaged audience with zero marketing background or social media experience.

So he created another small bet: a 100-minute video course called "Everyone Can Build a Twitter Audience."

He announced it on Twitter and to his 880-person email list. Four hours later, he'd sold 100 copies for $6,358 in revenue.

That course would go on to generate over $310,000 from 13,000+ sales. Time invested? Just 16 hours.

The results were undeniable: his "small bet" approach was generating better returns per hour than his Amazon salary ever did.

But Vassallo wasn't finished. In 2021, he launched a cohort-based course teaching others the small bets philosophy. To avoid the tedious introductions common in cohort courses, he created a Discord server where participants could introduce themselves beforehand.

Something unexpected happened. The Discord community didn't just facilitate the course—it became more valuable than the course itself. Members kept coming back, sharing ideas, asking questions, and supporting each other's projects. The community was alive in a way that surprised even Vassallo.

So he pivoted. He reframed the offering from "course with community access" to "community membership with course included." He switched from cohort-only enrollment to open membership with a one-time lifetime fee (no subscriptions). The Small Bets community was born.

The results were staggering:
- November 2021 to October 2023: $824,409 in revenue, $601,895 in profit
- 41 consecutive cash-flow positive months
- Over 6,800 lifetime members
- A thriving ecosystem of small-time entrepreneurs helping each other succeed

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In April 2024, Gumroad—the platform Vassallo had used to sell all his products—approached him with an acquisition offer for Small Bets.

Gumroad had already purchased 10% of Small Bets for $500,000 a year earlier. Now they wanted the remaining 90%.

The deal structure was beautifully aligned with Vassallo's small bets philosophy:
- $3.6 million total sale price
- 50% cash ($1.8M paid in two installments)
- 50% stock options (vesting over five years)
- Vassallo continues running Small Bets for five years
- If he quits early, he forfeits unvested options

At an 8X profit multiple based on 2024 earnings, it was a solid exit. But more importantly, it aligned perfectly with Vassallo's values: he maintained control, stayed self-employed, and positioned himself to benefit if Gumroad grows into a $10M+ profit business.

From walking away from $500K in 2019 to a $3.6M exit in 2024—all while maintaining the lifestyle freedom he had originally sacrificed.

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Vassallo's journey isn't just a success story. It's a masterclass in thinking differently about risk, value, and success:

1. Intrinsic motivation outlasts extrinsic rewards. Promotions and raises feel good for a week. The work you'd do even if no one was watching—writing code, creating products, charting your own path—that never gets old.

2. Success is unpredictable, so control what you can. You can't predict which project will succeed. But you can control how much time you invest before finding out. Small bets limit downside while maintaining upside.

3. Freedom is worth more than money—to a point. Vassallo isn't anti-money. He made smart financial decisions, saved aggressively, and took calculated risks. But he understood that beyond a certain threshold, more money doesn't buy more happiness. More freedom does.

4. Credibility compounds. His AWS book worked because he'd spent eight years at Amazon. His Twitter course worked because he'd built a real audience. His community worked because he'd proven the small bets model. Each bet built on the previous ones.

5. The best time to diversify is before you need to. When Userbase wasn't gaining traction, Vassallo didn't panic or pivot completely. He added more bets to his portfolio. This gave him options and removed the desperation that kills most solo ventures.

6. Community beats courses. Vassallo's most valuable asset wasn't his information products—it was the network of people helping each other implement what they had learned. The Small Bets community proved that ongoing connection trumps one-time content.

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Today, Vassallo continues to run Small Bets under the Gumroad umbrella, helping thousands of aspiring entrepreneurs learn to think in small bets rather than huge moonshots. His Twitter following has grown to over 160,000. His portfolio of products continues generating income with minimal ongoing effort.

He's not building the next unicorn startup. He's not trying to 10X his net worth every year. He's not working 80-hour weeks or raising venture capital.

He's doing work that matters to him, on his own terms, with the freedom to spend time with his family in Seattle.

He has shown thousands of others that there's an alternative to the traditional "all-in on one big bet" approach to entrepreneurship. You don't need to risk everything to win. You just need to place many small, smart bets and let the winners compound.

In a world obsessed with unicorns and billion-dollar exits, Vassallo proved that sometimes the smartest move is to think smaller, bet often, and design your life around what actually makes you happy.

Not what makes investors happy. Not what makes your LinkedIn profile impressive. Not what generates headlines.

What makes you happy.

That's the real fortune Vassallo walked away from Amazon to find. And six years later, it's clear he found it.

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The bottom line: Daniel Vassallo didn't quit a $500K job to get rich. He quit to reclaim his freedom and rediscover intrinsic motivation. By applying venture capital thinking to personal projects—placing many small, quick bets instead of one massive gamble—he built a portfolio that generated millions while maintaining the autonomy he craved. His $3.6M exit to Gumroad proved that you don't need to build a unicorn to win. You just need to stack enough small wins to design the life you actually want.