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Thursday, May 21, 2015
Startups: When It's Time To Start Yours
Part two of an ongoing series.
This second part of a multi-part series explores when an employee realizes he (or sometimes she) needs to explore starting a business of his own.
The highest and most difficult hurdle is to understand that life as an employee is not the road to security that popular culture leads you -- manipulates you -- into believing. It is the road to dependency where your entire life is subject to control by the "owners of the means of production" who are dispassionate about and indifferent to your concerns. (That's how it should be. The flip side to that indifference is that you maintain your privacy and some semblance of control over your reputation and outside-the-workplace life.)
This core reality requires you to accept the fact that life as an employee, and just surviving as an employee (keeping your job) comes with some unpleasant realities. The most unpleasant and terrifying for most people is the idea that there is no job security whatsoever.
The idea of a secure job is a fantasy. Our information economy is rapidly commoditizing knowledge and eroding barriers to entry for newcomers. While we have more knowledge, it's never been cheaper to acquire it. Unless you have a unique skill derived from how to USE that information -- what I will colloquially call "judgment" -- your information, your degree, even your years of experience, are easily replaceable. And that's for highly skilled and highly intelligent workers. It's even worse for the white collar support staff. The supply of relatively cheap labor and a flat demand explain why today's cities are full of armies of white collar employees with falling real wages and vanishing "job security."
Still think being an employee is a good life?
The reality is that survival as an employee requires you to have enough value to be irreplaceable. You must win the value game. And there are precious few ways to do that.
The easiest way is to have a book of business. Revenue generators sell themselves, and there are very few of them. Without your own business, you are at the mercy of those who have it.
In short, without business, you're dead.
The vast majority of people never generate any business. Rest assured, if you have been in any profession for more than a few years and cannot generate any business, you are either hopelessly mediocre or in the wrong market. Many people have no business, and that's because they have no business being in that industry to begin with. What is their future, your future?
Here's what it is. It is making a living off the revenue generated by someone else. That means that the generator is sharing his revenue with you. Are you worth it today? And what about tomorrow?
If you're afraid about asking those questions, maybe because you have no business or just a little business and are scared about how hard it is (which is okay, that's actually a good sign you're realistic and pragmatic), then you have to think about this choice:
You can go out on your own, and worry about getting business, or
You can stay as an employee, and worry about your boss -- that miserable prick of a boss -- thinking whether you are worth whatever it is he's paying you?
Think carefully, now, and look around at your co-workers. How many of them would you trust to generate business for you? How many would you trust to do a good job for you if it were your business?
The answer should be: very, very few.
But this is how YOU are being viewed. By your employer right now. And unless you bring in revenue, you have little to no value above an anonymous replacement.
And if you glance over the cubicle walls, you'll see lots of middle-aged professionals, who despite their credentials, their pedigrees, their family connections, really don't do a hell of a lot. Subtract the big-company name-value from their business card or LinkedIn profile and you have an empty suit most of the time.
This reminds me of a statistic, or metric, now in vogue in some professional team sports to assess an individual player's performance. It's called "wins above replacement," or "WAR." It means a player's value is measured against the expected performance of anyone on average who is called up from the minors, from the college ranks, or even from juniors (the underage ranks for hockey players before turning pro). The lower your WAR, the more your roster spot -- hell, your career -- is in jeopardy.
In today's white collar information economy, if you don't have business, and otherwise don't have an office godfather who is protecting your job, your WAR is basically zero. That's because there is always someone younger, hungrier, more eager to please, more naive, more easily deceived and more willing to work longer and harder and for less.
No business, no future. No doubt about it.
So being an employee means always looking over your shoulder. And for....what?
Now, there are some qualified exceptions. There are exceptional employees who are indispensable because they are hard to replace. But these people are also likely to be working at one hell of a discount to their true value. Think about that: you are the irreplaceable employee because you are getting paid less than you're worth! So your job security is really nothing beyond being a function of your being undervalued, exploited, taken advantage of.
In the legal profession, even the most brilliant lawyers, who don't have their own book of business and must work for someone else, cannot command much more than $100 to $125 an hour for their time. This is how exceptional lawyers who have argued before the United States Supreme Court have been "de-equitized" by their firms, which means they are being cashed out of their ownership stake and allowed to stay on as employees with a title of partner. Banks are even quicker to optimize the desk space. Out you go, and your "book" may already be on someone else's desktop, by the way.
Some people do have job security of a sort because the cost to the employer of firing them, facing uncertain liabilities, and risking having to get rid of an unknown replacement are pretty high. But where is the growth? Where is the potential for wealth creation? No, you're just marking time hoping the company's stock goes up so your stock options actually are worth something.
And should you be wrong, and be anywhere over the age of, oh, thirty-five, you might be looking at a decline in real income of two-thirds or more, if you don't have your own business.
Now you should see that you can never avoid having to confront your fears of developing your own business, your own brand.
To be sure, this advice is not for everyone.
It is actually only for very few. The leaders, the influencers, the achievers, or at the very least, the ones who dream and desire more, and who are willing to work and give it a shot.
Rest assured, the losers, fakers and frauds aren't reading this, so you're already ahead of some of your "competition."
Next in this series, we'll look at some pragmatic steps for getting started.