Entrepreneurship Safer Than the a J-O-B?

[guadalupepaz82]

My friend, Taylor Pearson, just published a book called The End of Jobs. The book argues that jobs are more competitive and less profitable than ever, and that entrepreneurship is safer and more profitable. There's some great stories in this book to illustrate this point, but, what's /r/entrepreneur's take on that?

I quit my job as a high school special ed teacher in 2013 to pursue running my own agency, and though it's been tough, I don't regret it for a second. Watching the people I went to college with stress over renewing their license, getting 2% raises (on a crap starting teacher's salary, but that's a different topic for a different day) ...much better to have many clients/customers over one boss as James Schramko says

I still have the automated, weekly "open teacher positions" email come to my inbox, because that sh*t is motivating!

Here's the book if you're curious. (it's free).

 

[kateeight]

@guadalupepaz82 Many entrepreneurs argue that it’s riskier being an entrepreneur than having a job. I understand why that’s argued and why it’s in some senses very true; you can point to bankruptcies, debt, or failed businesses as very real risks and downsides.

Yet, most entrepreneurs would readily agree with the notion that jobs are getting riskier. "No one gets a company watch anymore." Few jobs today will last for a whole forty-year career. There is equally real danger in spending twenty years understanding one company culture and guidelines for filling out internal reports without acquiring skills which effectively transfer to larger markets.

How many individuals have been laid off in the 21st century only to realize that the main skillset they built up was how to play corporate politics and appease their bosses? Winding up unemployable or taking a large wage cut in peak earning years is just as real of a danger.

Many entrepreneurs would also agree that, under those same conditions, having a more robust skillset and becoming more entrepreneurial makes you more resilient and adaptable.

At some point, those lines intersect. While it’s certainly reasonable to ask when that point is and whether we’re there or not, it seems like the point is largely evaded because of antiquated societal narratives.

If someone’s company goes under, they took a risk and lost. If someone invests hundreds of thousands of dollars in a Bachelor’s and MBA degree then gets hit in a round of layoffs, they were “unlucky.”

Those aren’t untrue statements, but they are misleading.

The notion of someone getting unlucky confuses the issue of agency. It attributes power and control to some mysterious “them.” “They” laid me off, or “they” didn’t give me the opportunity I wanted.

The remarkable thing about our time is that never before have we had more agency and control than we do today. What lines such as “the gatekeepers are dead” allude to is fundamentally true and essential to understand for our generation: never before in human history have we had the same degree of control over our own futures.

P.S. If you couldn't guess, I'm the author! Would love to answer any questions if people have them! Main motivation for me is getting the book in people's hands who it could benefit while it's free

 

[princeadedeji]

@kateeight Hey Taylor,

Just want to say thanks for putting this out there to us for free. I'm a fifth of the way through the book and I am really enjoying it.

I even had some ideas last night to help pivot on my next venture!

Anyway, thanks and keep up the good work!

 

[kateeight]

@princeadedeji Cheers! Glad you're enjoying it

 

[613jono]

@kateeight Could I get a copy of that book while it's free?

 

[poohbear2013]

@kateeight Thanks for sharing this. "The future of work" is an important discussion we need to have and the more we get people thinking about it the better.

That said, I would point out that by framing the discussion on a false dichotomy between the "versatile, adaptable entrepreneur" and the "mindless corporate drone with no transferable skills" you are going to alienate a lot of people who see the continuum with those points at the extremes as largely irrelevant to the underlying issue, which is how to build a valuable (read: future-proof) skillset and market yourself such that you are fairly compensated for your work -- regardless of whether it is as a business, contractor, or employee.

I do like your point about how societal narratives define the traditional perspectives on entrepreneurship and employment, and how in either case, it ultimately should be viewed as a matter of personal responsibility. Whether working a job or starting a business, a person with the mindset of having to personally create value for themselves or within an organization will always be better off - more adaptable and more skilled.

I think one hard truth is that that responsibility is not something many people want, they may just want to exchange a block of their time every day for the money they need to otherwise function in society and be done with it, not be concerned with how the work they do and skills they have translate to value creation in broader contexts.

I'm not much of a reader, but I'll take a look at your book.

 

[rubixk]

@guadalupepaz82 My thinking has always been simple: no one cares about whether I have a job than I do. That's why I work for myself.

 

[asgb]

@rubixk That makes a lot of sense, I've never had thought this way

 

[mekay222]

@guadalupepaz82 Of course a job is safer. What is being risked in a job, unless one accounts for college costs, but that should be accounted for in entrepreneurship as well. As an entrepreneur, one is risking an investment in the business. There is no such risk in a job. That doesn't make a job better though. More risk = higher potential returns.

 

[sally454]

@mekay222 Time is the trade off in a job and is the highest risk. You also risk being tied to a single income

 

[sally454]

@mekay222 You added risk by having a lease and tying yourself to that one client

 

[mekay222]

@sally454 By "single income" I mean a single income stream. I have thousands of clients, but it's still a business with significant risk. Literally all 20+ competitors I've had over the years within 10 miles of me have gone under, and thousands of others have failed across the U.S.. My other business has tens of thousands of customers and is even riskier. Both are tied to property leases which one cannot easily get out of. One with a job can simply take the stuff out of their desk and relocate to a new job elsewhere, while I have some $400k+ in capital on the line. There really isn't much of a comparison between the 2 as there is really nothing being risked in a job. Even one's time is hardly risked as you are paid by the hour/salary... so each hour you put in, you get paid for. The same cannot always be said about owning a business.

 

[kateeight]

@mekay222 I would say more perceived risk = more reward and that currently there is a gap between the reality of risk and the perception of it. The internet has democratized/made radically cheaper "investment in the business" while at the same time increasing potential market size (you can sell to anyone on the internet).

The inverse is also true. If you have a high monthly burn rate to sustain and get laid off w/o any marketable skills or skills that used to be marketable but aren't anymore (say bookkeeping), you're in a tight spot. Very little means to replace that income.

Corporations evolved in part because the ability to measure an individual's contribution/value creation was always poor. That's less and less true because of technology.

I think anyone that has worked in a large corporation would agree that a large portion of the corporation produces net 0 or net negative actual value and a few people produce all the value.

If you are in the value producing section, it makes sense to find a way to get a bigger cut (since you're creating more than your compensated for).

If you aren't in the value producing section, you better figure out how to get in it because you're likely to get found out in the near future.

 

[mekay222]

@kateeight

I would say more perceived risk = more reward and that currently there is a gap between the reality of risk and the perception of it.

Certainly true, but the market always catches on eventually.

Skills are also needed in business, and those skills too will be replaced eventually. A business of bookkeeping is no safer than a job bookkeeping. Moreover, a business has competitors coming along all the time, while a job tends to be more stable... and one with a job can simply move to the better business, while the business owner isn't so fortunate.

Corporations evolved in part because the ability to measure an individual's contribution/value creation was always poor. That's less and less true because of technology.

Not sure I understand what you're trying to say? You believe a corporation can better measure value than an individual doing his/her own tiny business? Are you serious? Corporations evolved primarily because of the benefits of economies of scale, which require capital investment, and capital investment requires ownership by numerous shareholders. It allows numerous individuals to come together and create/invest in a growing business. It also reduces individual liability. It had nothing to do with measuring individual value creation.

 

[kateeight]

@mekay222

Skills are also needed in business, and those skills too will be replaced eventually. A business of bookkeeping is no safer than a job bookkeeping.

I should have done a better job articulating my definition. I would argue that "entrepreneurship" as a skillset isn't industry dependent. You certainly need skills beyond just entrepreneurship, but in my observations entrepreneurship is more about identifying opportunities to create value, creating and then extracting it.

Fine, your bookkeeping business is threatened. So you see an opportunity to convert a part of your bookkeeping process into software and integrate with Quickbooks so you become a software company.

I see that sort of stuff play out all the time. The entrepreneur is thinking "how do I create and extract value from the marketplace," the bookkeeper is thinking "how do I keep the books."

You believe a corporation can better measure value than an individual doing his/her own tiny business? Are you serious?

No, the opposite. Poorly articulated on my part. Smaller companies or individuals better understand where value comes from as you said.

Corporations evolved primarily because of the benefits of economies of scale, which require capital investment, and capital investment requires ownership by numerous shareholders. It allows numerous individuals to come together and create/invest in a growing business. It also reduces individual liability. It had nothing to do with measuring individual value creation.

Definitely a multi-factorial issue. Corporations came around for a lot of issues. Two of which I ignored and you pointed out.

What I was trying to get at is that part of the reason for corporations evolving were that it was hard to "unbundle" and figure out what piece of the pie was worth without making the whole pie way more expensive.

For example, it used to take a record company to identify talent, record, market, and distribute. Now those pieces are all fragmenting. If you're the talent, you don't need a recording studio, you need garage band. You don't need Best Buy, you need CD Baby and iTunes, etc.

All that is unbundling now so the efficiencies (or lack thereof) are clearer. The dude milking a paycheck because of his rich uncle in the recording company is much more obviously useless than he was 20 years ago

 

[zebruh]

@guadalupepaz82 A job is safer. Most entrepreneurs and startups fail. But of course, if you do make it as an entrepreneur the reward can be high as well.

 

[mmerchant]

@zebruh ^