Chapters

Chapters
What’s in it for me? Understand why now is the time to become an
entrepreneur.
1
Every system has a limit that can be surpassed.
2
While baby boomers only needed credentials to succeed, today a degree
doesn’t guarantee financial security.
3
Today, knowledge-based jobs can be outsourced or mechanized, which can
actually be advantageous.
4
Being an entrepreneur now is actually more profitable and safer than
having a job.
5
Modern technology has made entrepreneurial investment easier and safer
than ever before.
6
Unlike the obligation of a job, being an entrepreneur allows you to work
on what is meaningful to you.
7
The Stair Step Method is one way to become an entrepreneur and start
your own business.
8
Final summary
Aa
Text Settings

For You

Explore
The End of Jobs
00:00
Introduction
What’s in it for me? Understand why now is the time to become an
entrepreneur.
Ever since our childhood we’ve been told to go to school so we can get a good job.
A sentiment that still holds strong. But does it hold water? Given that more people
than ever before have a college degree and the whole world is just a few keyboard
clicks away, it might be time to reconsider this sentiment. Something has indeed
changed. In our globalized modern world, a job is no longer the safest route to
financial security. From outsourcing to unemployed college graduates, it looks like
we are in a recession, but we could also be witnessing the limits of a decaying
system and the beginning of a new one: a paradigm shift and the end of jobs as we
know it. In these blinks, you’ll find out how the English King Henry VIII made capital
more important than land; why great entrepreneurs think like poker players; and
how population growth in the U.S. has increased unemployment.
00:55
Chapter 1 of 7
Every system has a limit that can be surpassed.
There are many variables that determine how society progresses. One variable
particularly worth examining is the limit of the systems we live and work in.
Software entrepreneur Eli Goldratt came up with this theory of constraints in the
1980s. According to Goldratt, every system that has a goal also has a limit: a part of
the system that restricts growth. So if your factory has two assembly lines that
produce 100 units of a product and one that produces only 50, that third line would
be the limit. In order to progress, then, we need to work on this limit. For example, if
you have a great product but nobody’s heard of it, you won’t boost sales by
improving your product. Here, the limit you need to improve on would be your
marketing strategy. According to systems thinker Ron Davidson, the last three major
changes in the Western economy occurred when the limits changed. Back in
fourteenth-century England, the agricultural economy was based on land, and since
the Catholic Church owned the lion’s share of it, they controlled the economy.
Therefore, the limit was land until the sixteenth century, when Henry VIII appointed
himself head of the Anglican Church and revoked Rome’s control over it. Then, at
the dawn of the industrial age in the 1700s, bankers became more powerful than
kings, shifting the limit from land to capital, and forcing land-owner and Prussian
King Friedrich Wilhelm III to ask bankers for a loan to finance his wars. Later, in the
1900s, we shifted from a capital economy into a knowledge economy. Knowledge,
proliferated by technology, became the new limit, making companies like IBM
extremely powerful. This was evident in 1975, when IBM successfully issued a billion
dollars in bonds, despite their bankers at Morgan Stanley refusing to cooperate.
Since the early 2000s, though, we’ve seen a weakening of the knowledge economy
as a burgeoning entrepreneurial economy gains momentum. Read on to find out
why.
03:13
Chapter 2 of 7
While baby boomers only needed credentials to succeed, today a degree
doesn’t guarantee financial security.
Jobs are becoming increasingly hard to come by and, believe it or not, those in their
fifties today are partly responsible for it. After WWII, the economic boom pushed the
knowledge economy to its limit, and it began morphing into a new system. People
born in the U.S. in the first two decades after WWII – the baby boomers – enjoyed a
period of economic prosperity and an abundance of career options. According to the
U.S. Census Bureau, jobs grew 1.7 times faster than the population between the
years 1948 and 2000. This growth meant that baby boomers simply had to get a
college education and the right credentials, and they’d walk straight into a job. The
next generations followed suit, believing it would remain this way. But there was
never any guarantee that the economy would stay the same. And it hasn’t. In fact,
since 2000, the population has grown 2.4 times faster than have positions on the
job market. This explains the plethora of well-educated, jobless graduates. In the
U.S., over half the recent college graduates are either unemployed or employed in a
position that doesn’t require a degree. From this we see that knowledge in the form
of credentials is no longer the limit. We’ve reached the peak of 9-to-5 jobs and we
are now witnessing the beginning of entrepreneurship. Interestingly, the only jobs
on the rise since the 1980s are non-routine cognitive jobs: creative, unpredictable
work rather than work involving completing the same task every day. Our economy
is expanding based on creativity and innovation. In other words, creativity is the
new limit and the new power players are entrepreneurs who set up businesses and
pursue innovative ideas. The apartment rental website AirBnB is a great example:
they started out by posting apartments on Craigslist, an external site that lists
apartments, as a creative way to market their own business.
05:27
Chapter 3 of 7
Today, knowledge-based jobs can be outsourced or mechanized, which can
actually be advantageous.
Aside from the dearth of jobs in the U.S., there’s another reason finding work has
become so difficult: the possibility of outsourcing. Modern communication
technology and increased global education has released us from our office cubicles
and the number of people with university degrees has dramatically increased,
making degrees less valuable. In fact, the number of college graduates in the world
increased from 90 million in 2000 to 130 million in 2010. But what does this mean?
Well, when we add technology like the video calls of Skype into the mix, this means
that qualified talent can be hired and work from anywhere in the world. This also
means companies can employ workers from countries with lower wage
expectations. An English-speaking web designer in the Philippines, for example, can
be employed for an annual salary ranging from $700 to $1,400. A shocking contrast
to the expected salary of around $82,000 for a web designer in the U.S. Machines
are increasingly replacing humans in industry, especially factory workers whose jobs
are now carried out by hardware and software. But these machines have moved
beyond factory tasks and can be used in knowledge-based jobs. Take Eventbrite, a
company that sells tickets online which are booked and paid for entirely by
software. So what can you do? Don’t wait around to be replaced by software – own
it. Modern technology has made running a business financially viable for more and
more people, and an entrepreneur can run a small company using an international
talent pool at a relatively low cost. Such startups are often called micro-
multinationals. Jesse Lawler, for example, runs Evil Genius Technologies, a Vietnam-
based software company which employs workers from England, India, the
Philippines, and other countries. Lawler has sales and customer service people in
the U.S., while his programmers live in Vietnam. This way he cuts down drastically
on his expenses: living costs alone would make it impossible for Lawler to hire more
than two developers in the U.S. For an entrepreneur, modern technology presents
an abundance of opportunities.
08:02
Chapter 4 of 7
Being an entrepreneur now is actually more profitable and safer than
having a job.
The benefits of having a steady job have been drilled into our heads since we were
children, but what if we were misinformed? A steady job today means exposing
yourself to an insidious risk that is out of your control. In our current economy, your
steady income can disappear at the drop of a hat, leaving you clueless as to how to
recover. Your regular paycheck gives you a false sense of security, and you may
easily be replaced by an equally talented employee in India who is willing to work
for less. It’s a harsh reality but, if you’ve followed orders your entire career, you
won’t have the skill set to create options for yourself. Think of this as the Turkey
Problem: you’re like a turkey, relying on being fed everyday until one day you’re
sent to the ax! Entrepreneurs don’t have this problem, as they deal directly with
visible risks. They may not make an immediate profit, but they acquire skills and
create systems and can change them if they don’t produce the desired results. In
other words, they enjoy unlimited control and unlimited variables, and the
possibility for growth is vast. Most of the entrepreneurs the author talked with would
actually be disappointed with a growth rate of 20 percent per annum. Much like
poker players, entrepreneurs understand the concept of expected value. This is the
average value in a series of repetitions of a random variable. Say you’re playing a
hand in a poker game and it’ll cost you $1,000 to view the final card. You know
there’s a 20 percent chance you’ll win $20,000 for the whole hand. So you’re
coughing up $1,000 for an expected value of $4,000, which is 20 percent of
$20,000. If you place this bet enough times, you’re guaranteed to come out on top.
It’s no surprise, then, that many poker players end up being entrepreneurs.
10:12
Chapter 5 of 7
Modern technology has made entrepreneurial investment easier and safer
than ever before.
Starting a business is for highly intelligent business types with piles of cash, right?
Actually, thanks to modern technology, anyone has the possibility to do anything
from designing furniture to publishing a novel. Apple mogul Steve Jobs even said
that entrepreneurs aren’t necessarily smarter than the average person. One thing
that has changed the game of business is, of course, the internet. One way it has
done so is by dramatically reducing production costs. The tools needed to create a
product are more affordable and more widely available than ever before. Take
Software as a Service, i.e., businesses like Adobe Creative Cloud that sell software
on a subscription basis. Whereas in the past you needed to invest in pricey
equipment and sign long-term contracts, now quality services can be accessed on a
monthly basis. So, instead of spending hundreds of dollars on accounting software,
you can now pay $9 a month for an accounting program like Xero. The internet has
also lowered distribution costs. Along with accessing manufacturers in lower-cost
countries, you can also reach and distribute to customers directly. The author, for
example, used to work for a business that made and sold portable bars. By
manufacturing in China and distributing directly to consumers, they were able to cut
their costs by about 25 percent and improve the product’s quality. The internet is
also constantly creating new markets, largely because location is now irrelevant. For
instance, in the past you would use a law firm because it was near your office. Now,
you can use a website like UpCounsel to find a vetted lawyer who specializes in your
needs, regardless of your location. If you’re an entrepreneur, you can also more
easily serve niche markets on the net. Firegang Dental Marketing, for example,
offers digital marketing services exclusively in the niche of dentists who want to
reach new customers.
12:24
Chapter 6 of 7
Unlike the obligation of a job, being an entrepreneur allows you to work
on what is meaningful to you.
Prehistoric hunter-gatherers didn’t work like we do today: they worked to survive.
But this changed at the beginning of the agricultural revolution. After that, work
became an obligation. When we started creating farming communities, we worked
to collect foods we could store or trade. Tilling the land was arduous, constant work
to amass wealth rather than to survive. After the industrial revolution, factory
workers viewed work and wages as a means to improve their quality of life. So they
bore the obligation of routine factory tasks as they believed it would lead to a better
life. This idea probably seems very familiar to you. That’s because we still hold onto
it today. However, today it’s possible to find more meaningful work. But how do we
really weigh meaning versus money? Economist Dan Ariely conducted a
psychological study in India to find out how powerful money was as an incentive. In
Ariely’s study, a group of workers were assigned a complex task that was impossible
to solve by using a formula, much like entrepreneurial work. One of the tasks, for
example, was to unscramble an anagram. The first subgroup was offered a day’s
wages for the task, the second two weeks’ wages, and the third five months’ wages.
Surprisingly, the higher the reward, the weaker the performance. This is because
meaningful work motivates us more than monetary incentives. We also saw this in
2006, when Mark Zuckerberg was offered $1 billion by Yahoo to buy out Facebook.
Zuckerberg didn’t even consider selling. Why? His work meant too much to him. As
of 2015, Facebook is worth $230 billion. In the end, Zuckerberg got to continue
doing the work he loved and made a staggering profit to boot. This is all the more
proof that starting a business that fulfills us is far more viable than we have
traditionally been taught.
14:43
Chapter 7 of 7
The Stair Step Method is one way to become an entrepreneur and start
your own business.
Being an entrepreneur isn’t always a walk in the park, but it’s not as treacherous as
you may think. Rob Walling, leader of three software companies, used his
experience to create a useful entrepreneurial method known as the Stair Step
Method. The first step involves creating and launching a single product, selling it for
a one-time fee, and using just one marketing channel. By keeping things simple this
way, you’ll learn some business basics without the pressure of a highly competitive
environment, how to build and market a product, how to network, and how to hire
and manage a small number of employees. The next step is to launch enough one-
time products to be able to quit your job, as Walling did before becoming a
computer programming consultant. In 2005, he launched a few products and
acquired some invoicing software still in its development stage, but he was only
bringing in a few hundred dollars a month. At this point, your focus should be on
generating enough income to buy back the time you put into your day job. This will
also allow you to gather business experience, a network of entrepreneurs and a
stable workforce. Walling was able to teach himself marketing just by building on
the SEO that the previous owners of the software used. He then used the capital he
gained from consulting and the SEO skills he learned to purchase and run an e-
commerce website selling bath towels. After you’ve launched some products and
gained some experience, it’s time to expand your business. You could launch bigger
products or create a membership site, for example. After buying the towel website,
Walling increased the company’s profit from zero to $2,500 per month. One key
thing to remember is that no college course can make you an entrepreneur. While
education used to be the ticket to financial stability, now practical experience is the
way to acquire the skills you need to get meaning and income from your work.
16:56
Conclusion
Final summary
The key message in this book: The promise of a stable 9-to-5 job at the end of
college has been unsustainable since the turn of the century. Our society is
transitioning into an entrepreneurial economy and now, more than ever, is the time
to take advantage of technology to create meaningful work that embraces risk and
creativity, and offers more wealth and freedom than the broken tradition of the 9-to-
5 grind. Actionable advice: Make decisions like a billionaire. When investing,
diversifying is the key, right? Wrong! If you want to see real gains, look at the
strategy of Warren Buffett and Charlie Munger of the $300 billion Berkshire
Hathaway holding company. Instead of diversifying, day trading or trying to beat the
market year by year, these billionaires focus on 40-year time frames. The result?
They’ve raked in $50 billion over 50 years by sticking with only four to five
investments. Suggested further reading: The 10 Laws of Career Reinvention by
Pamela Mitchell The 10 Laws of Career Reinvention (2010) teaches you the career
survival skills you need for the twenty-first century economy. No matter what
industry you’re trying to break into, this book will help you create a successful
roadmap to your goal. Got feedback? We’d sure love to hear what you think about
our content! Just drop an email to remember@blinkist.com with the title of this book
as the subject line and share your thoughts!
Mark as finished
00:00
-17:42
The End of Jobs
Taylor Pearson
1×