Equity as Pay

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One way to improve your income is to increase the ways clients can pay you — hourly, salary, full-time, part-time, contractor, percentage of revenues, percentage of profits, barter. (To name a few.) One method that can make you a fortune — or, more likely, pay you nothing — involves taking a piece of the client’s company as compensation.

You get involved in a project — a start-up, perhaps — where they need your help but don’t have much cash to pay you. If you’re going to be their sales rep, the answer is easy: a percentage of revenue from your sales. But if you’re a techie or administrator or accountant, it’s harder to determine how a cash-strapped operation can pay you. So you offer to take part of your remittance as equity: a small-percentage ownership in the business.

You might be tempted to ask for, say, one percent. It seems reasonable — not too greedy. And, in a going concern, it could easily amount to a nice little income stream for you. 

The problem is that any ownership stake you receive early in the game is likely to become diluted as more people get involved in the project. To begin with, the founder is handing you a part of his or her ownership, and by the time new partners and banks and angels and venture capitalists have muscled their way in, the founder’s piece of the action has been reduced greatly. And your one percent shrivels to a few basis points. 

Knowing this, you may wish to ask for five- or ten-percent ownership. Then you call up your favorite contract lawyer and get an iron-clad agreement that guarantees you a payout in the event of a major change, such as when the business gets sold. 

Still, this method is fraught with dangers. An acquaintance got such a contract, with an elaborate payout clause in the event of a sale — but the company merged with another by buying it, which thereby canceled the clause. He received diddly.

You could ask, as the sales reps do, for a percentage of revenues. One problem here is that businesses often need bridge loans to keep going, and banks don’t take kindly to watching repayment revenues get tied up in employment contracts.

Another problem is exemplified by the way Hollywood does business. Moviemaking is inherently speculative, and talent sometimes negotiates pay based on “net profits”. But accounting standards permit studios to play fast and loose with the rules — and they pile every imaginable item into “costs” to reduce the net — to the point where major film successes often end up showing no gain. For this reason, movie “net profits” are sneeringly referred to as “monkey points”. 

In showbiz (and everywhere else, for that matter) it’s probably better to ask instead for a percentage of “first-dollar gross” revenues. If the owner balks, try to arrange your pay in some other manner entirely. Avoid monkey points.

Once the contract is signed, don’t hold your breath, because most fledgling operations go nowhere. For example, of 30,000 Internet start-ups each year, a mere ten will soak up more than two-thirds of all the resulting value — and one will be worth more than all the others combined. So it’s a steep hill to climb.

Why not make this kind of offer to an established company? Well, nobody wants to give up ownership — or issue a long stream of payouts over months and years — unless they have to. Major businesses usually have plenty of cash to pay contractors, so they’ll likely turn you down. Worse, now and then a big corporation will sign the contract, then simply renege and dare you to sue them. After all, they have great lawyers and lots of time, and you don’t. I know of two instances of this happening among my immediate network, and neither ended well for the victims.

(It’s not that all business leaders are pirates. Okay, some of them are. But all of them do run into problems now and then, and they start tossing things overboard, including vendors. On the other hand, when a business — especially a B-to-B — gets into fatal trouble and crashes and burns, its customers tend to stop paying their bills. After all, why throw money at a dead thing? So, deep in the cold heart of the corporate world, there beat little fluttery pulses of moral compensation for the rest of us.) 

Let’s review:

1. Ask for more equity than you’re comfortable with — say, ten percent — because that will get whittled down to almost nothing by the time you see dime one.

2. Get a really good lawyer. Make sure the attorney has found every nook and cranny where the business can bury a contract bomb that blows up your takeaway, and seal off those dangers. Then cross your fingers.

3. Hope for the best but prepare for disappointment. Take what you get, forgive them their trespasses, and walk away. 

Then: Onward! To the next job.



A Robot Took My Job

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If you are getting paid in excess of the value you create, you are either (a) a bureaucrat or (b) soon to find yourself replaced by a machine. — Adam C. Smith & Stewart Dompe

Back when ebooks first became popular and everyone bought tablet computers to read them, a magazine carried a cartoon in which two men, garbed in Renaissance clothing, were standing next to an early printing press, and before them on a table lay a brand-new book. One of the men said, “These are nice, but there’ll always be scrolls.”

Over the centuries, people have invented countless labor-saving devices, and today we reap enormous benefits from them: vehicles to transport us, washing machines for our clothes, indoor plumbing for fresh water at the turn of a tap, electricity to light our homes and refrigerate our food and power our TVs. 

Most of these devices have substituted for human effort and thrown people out of work. Most of us who are employed tend to avert our eyes from this problem. After all, it’s something that has happened slowly over the decades, and people managed to adapt and find new work. But times have changed. Jobs are becoming obsolete at an alarming rate. We need to rethink this challenge.

At the dawn of the Industrial Age, the Jacquard Loom took work from weavers, who responded with the first labor action: they destroyed looms and demanded the machines be banned. A century and a half later, a story circulated that Henry Ford Jr and labor leader Walter Reuther were inspecting a new car factory, and Ford pointed to the fancy automated machinery on the floor, chiding Reuther, “How will you get those to join your union?” Reuther snapped back with, “How will you get them to buy your cars?”

Each invention has created markets for new kinds of work, and today most people are still working hard. We haven’t yet been obsoleted. But in recent decades, after recessions, businesses have failed to re-hire with the usual robustness. Economists now talk about “jobless recoveries”. The arrival of robotics, computing, and information technology has allowed for large-scale automation of routine tasks. Mid-level jobs (factory workers, office clerks) have succumbed to computerization, while low-skill labor (janitors, home healthcare workers) and high-skill work (attorneys, bankers, scientists) continue apace.

No wonder it seems as if there are more poor and rich people, while the middle class dwindles.

On close inspection, all this makes perfect, if discouraging, sense. Low-wage routine jobs involve the kind of motor skills anyone can do: vacuuming, making beds, taking out the trash. Yet these abilities are daunting for robotics.

At the other end of the spectrum sit computer programmers and researchers and financial managers and attorneys and doctors, all endowed with high-end technical expertise. These tasks involve a great deal of intuition and pattern recognition, abilities tough to program digitally.

What’s common about both groups is that their skills are hard to automate. It’s more difficult for a robot to pick up a glass of water than for a computer to play chess. Thus janitors and high-status professionals are safe. For now.

Soon enough, though, there will come a moment in history — the Singularity — when machine intelligence exceeds in all respects that of people. At that moment all bets are off about the future of humanity. Assuming we survive the lethal dangers of such a juncture, what then will become of us as workers, as employees, as money earners? Will we be tossed from our jobs because machines can do everything better? Will robots and automation act like Jacquard looms on steroids, laying waste to entire marketplaces of employment? How will people buy food, pay the rent, and maintain their vehicles if they no longer receive their regular income checks? 

Nay-sayers argue that there’ll always be jobs because, no matter how many robots can provide stuff, there are ever more things people desire, and therefore there’ll always be a demand for an extra pair of hands. The problem is that, in the Singularity future, automatons will likely reproduce themselves quickly, as needed, in anticipation of desires. In other words, robots will also out-compete us in job creation.

How might societies respond?

• Riots — It happened in the early 1800s with textile workers; why wouldn’t it happen again this time, when most jobs suddenly disappear?

• Transfer payments — There’ll be calls for minimum personal incomes, essentially welfare for all, paid by the rich, to give consumers cash so they can buy products and keep production churning along.

• Nationalization of ownership — Governments might be tempted — along the lines of third-world “land reform” transfers of acreage to the poor — to force a partial allocation of stock ownership to the masses, so that everyone owns a minimal stake in the machines of production and the income that flows from it.

• Collectives of the unemployed — Groups locked out of robotic prosperity will develop what resources they have and trade among themselves until they accumulate enough material wealth to buy their own robots.

• A paradise of freebies — The same cost efficiencies that allow automatons to displace human workers will make products so cheap that anyone with pocket change can buy them. A TV for a dollar. A car for a hundred bucks. Dinner for a dime. Combined with a national wage, this will create a society where everyone — employed or not — is, in effect, independently wealthy.

Until that happens: those of us who need jobs will want to adapt to the shifting work environment. Here are some ideas:

Be useful — Automation is as yet poorly developed in areas requiring complex human movement, which can be anything from house cleaning to fine arts. Robots are still basically clumsy and autistic. The last jobs to fall will likely involve simple labor and/or strong social skills. If you can jump in and help with a variety of tasks, and if you play well with others on a team, you’ll likely keep your job longer. 

Strengthen your technical skills — Anything technical can be automated, but that process is by no means complete. Your know-how can serve you for a number of years hence, so keep it polished.

Work on your marketing skills — Sales require a human touch — who wants to get a pitch from a machine? — and we’re all to some extent marketing ourselves at work. Don’t assume your job is safe simply because you got hired. Layoffs will be rampant, but those who can make clear their value to employers will last longer.

Work multiple jobs — Even full-timers need to keep their options open in the current climate. Side jobs can expand into full-time work, or at the very least can backstop you if things go bad at your regular job.

Develop multiple streams of income — Any side job you can automate will provide cash with little effort, so you’ll have time to concentrate on the work that needs your full attention. Also keep a close watch on your retirement accounts and other investments, with an eye to growing them enough to support you before your expected retirement age. Forty years from now the world will be a very different place, so don’t assume Social Security will be there to prop you up, especially if you’re young.

Stay loose and adaptive — The world will change in surprising ways, and you’ll want to be ready to take advantage of it. If you rest on your laurels, or if you depend too much on one source of income, you may find yourself on the receiving end of a financial butt-kicking. It’s better to prepare so you can take advantage of changing circumstances.

None of this is bad news, not really. It’s different news. It may look like misfortune, but it’s simply a new set of conditions that contain opportunities. To quote an old sage: the prepared person is one who takes life as “an endless challenge, and challenges cannot possibly be good or bad. Challenges are simply challenges.”

* * * *

UPDATE: Robots will replace workers, reduce costs by 90%

UPDATE: Robots will take half of British jobs

UPDATE: Book The Future of the Professions

UPDATE: The job search as a full-time job

UPDATE: Automation will replace half of the world’s jobs in 30 years

UPDATE: A national income for the Post-Employment Age

UPDATE: Get ready to work alongside robots


Uber vs. the Taxis

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Taxicab companies want the world to stay exactly as it is, which is not actually good for anyone, to just say, ‘The way that we’re gonna run is the way that we were running in the 1950s, and that’s the way we’re gonna be running in 3000.’ — Reid Hoffman

How can Uber possibly survive? The private driving service, now a worldwide phenom, faces huge obstacles from taxi cartels, suspicious regulators and anxious voters who wonder: is Uber a good thing or some sort of business conspiracy to make a profit by disrupting the established transportation system?

Maybe it’s both.

Granted, Uber’s cheaper, quicker ride service — a car within five minutes and less than $2 per mile instead of roughly $5 for taxis — threatens government-approved taxi operators, who worked hard to obtain their medallions in a restricted market space. Granted, the news has now and then carried garish reports of Uber drivers attacking their passengers. Granted, it takes weeks to certify a taxi driver, while Uber drivers can accept passengers within days. Granted, Uber — and Lyft, Uber’s smaller competitor — threaten a unionized way of life by offering part-time, flex-time work opportunities. 

But Uber and Lyft provide a service that’s so compelling, it overcomes all objections:

• Per-mile costs are much cheaper than taxis. One driver I spoke with showed me a couple of typical fares he got, and they both worked out to about $1.50 per mile. Even if the average charge were $2.00 or $2.50 per mile, it would still cost half what an official taxi charges.

• Uber has a business incentive to process applicants efficiently, but its certification requirements are strict. Taxi drivers, meanwhile, must wait weeks because their unions aren’t in a hurry to add new drivers, who push down pay rates. Likewise, government accreditation bureaus rarely have a reason to hurry.

• Once on the job, Uber drivers are continuously rated by their passengers. Any driver whose rating drops below 4 out of 5 is subject to suspension. But the drivers also get to rate the passengers! A difficult Uber user will get bad marks and have trouble finding a ride. Thus everyone involved has an incentive to be polite and cooperative. Try getting that from a taxi service.

• Uber and Lyft offer cheap solutions to congestion, swarming quickly to where they’re needed while reducing the number of private vehicles parked on streets or clogging traffic. The service helps low-income, elderly and disabled users who can’t afford taxis. And passengers give it high marks. Local governments find all this irresistible. Taxi cartels keep losing the arguments.

• The ride-sharing market creates jobs. These days, with a staggering recession in the rear-view mirror and automation horning in on all sides, it’s harder and harder to get a steady full-time job. For the under-employed, Uber and Lyft step in and offer as many hours (or as few) as a worker can handle. The pay isn’t great, and there are no bennies, though with practice drivers can learn tricks of the trade and improve their take-home. But the service offers a flexible way to add to a driver’s bottom line, all the way up to full-time work. It’s hard for politicos to say no to that.

Any one of these makes a compelling argument in favor of the ride-sharing industry. All of them together make it seem unstoppable. 

Still, there are pitfalls. Unions and taxi cartels and governments may yet find ways to suppress this nascent marketplace, to pull its monkey wrench back out of the bureaucratic machine.

But the greatest danger may lie within the corporate offices of Uber itself. Its leaders have been accused of arrogance, of flouting the law, and of cutting driver net pay. Reid Hoffman, founder of LinkedIn and a high-tech venture capitalist, believes Uber should tone down its aggressive approach with regulators:

The company tends to be very combative. . . . [Regulators] may be slow to change, they may be risk-averse, but their goal is a mission of protecting society. And so you should interface with them on that channel more than on the ‘Just get out of my way, I’m innovating.’ — Reid Hoffman

Meanwhile, Uber and Lyft have checked off all three main requirements for a successful business in the modern age:

1. Great product — A cheap ride in five minutes!

2. Great marketing — Both Uber and Lyft have branded themselves ingeniously, the word-of-mouth is tremendous, and all the media attention gives ride-sharing tons of free publicity.

3. Great fulfillment — The app is easy to use, payment is handled automatically, and the cars are reliable and clean.

Uber may yet shoot itself in the foot and limp off into history. More likely, though, is that the ride-sharing company will be remembered as the front line in a phalanx of businesses — Airbnb, TaskRabbit, Angie’s List — that attack the limitations of an aging corporate infrastructure.

We may be witnessing the decline of the standard 40-hour job, replaced with work that adapts to workers’ schedules, responds quickly to changes in consumer demand, and automatically rewards excellence and civility.

The Uber/Lyft revolution is hurtling toward us like a fleet of rebellious vehicles, and in each car sits … the future.


UPDATE: Consumers wrest control from government

UPDATE: How Uber got a city council to back off

UPDATE: Uber’s peaceful revolution

UPDATE: Driverless L.A. Taxis at 25c/mi


The End of Job Security


If your job description isn’t already changing, it probably will in the near future. You can’t afford to stand still in your career. — Daniel Burrus

Today, a tap on your smartphone brings a clean, quiet, inexpensive taxi service to your door in less than five minutes. Another tap on your phone brings up a list of private rooms you can stay in while on a trip. Tap again and you get a roster of assistants who will bid to help you with nearly any type of project.

Meanwhile, workers grouse because they must labor at two part-time jobs instead of one full-time. They grouse because businesses are hiring help from overseas instead of locally. They grouse because corporations use robots instead of humans. They grouse because suddenly their work lives aren’t secure anymore.

What’s going on? Clearly employment is shifting and changing. Advances in technology bring conveniences to our lives while threatening our jobs.

Yet there’s more to it. The time of the corporate worker may be coming to an end, and we’re not ready for it. We are challenged, not merely to get a second job or write protest letters to our legislators, but to change our attitude.

Most of our great-great grandparents worked on farms. They had to bring in the crops, slop the pigs, milk Bossy, and batten down the barn against storms. If they got kicked by a horse, there was no emergency vehicle to rescue them. If the crops failed, they could starve.

The post-Civil War Industrial Revolution put huge factories in the cities, and people flocked there to find steady, if dull, work. Over the decades, factories and office buildings became the centers of our work lives. The entire culture shifted to adapt. It’s taken decades to get to this point, and it’s proven to be a tremendously prosperous way of life.

We’re raised to be workers in this corporate world. We start in families where Mom and Dad are the bosses who hand us chores and give us allowances. We grouse about them but depend on them. For school, we must get up to an alarm on weekdays, show up on time, do our studies, and receive our grades. We grouse about the teachers but depend on them. When we graduate, we find jobs where we must get up to an alarm on weekdays, show up on time, do our work and receive our pay. We grouse about the bosses but depend on them.

Today, most of us do as we’re told and receive our paychecks, all in a safe locale. We’re supported and protected by the institutions in which we toil. And now the rug’s being pulled out from under us.

High-speed advances in technology make for high-speed changes in the work world. Products and services get taken over by computerized processes. It’s no longer the age of “forty years and a gold watch” — it’s the age of the contractor and the entrepreneur. And most people aren’t ready for it at all.

In a corporate culture our work incentives are similar to what they were back at home and in school: do what you’re told, don’t make trouble, get your grades— er, pay. We’re rewarded for behaving like obedient children. It’s a tidal pull, and most of us succumb to it. We’re juvenilized by society. 

Just because we’re over 21 doesn’t mean we’ve grown up. We think, “Well, I finished school, got a job and a car and a place to live, and I’m dating a great person and we’re gonna get married and raise kids. I must be a grown-up.” But that’s a child’s idea of adulthood!

If you’re waiting in the placement office for someone to pick you, you will be consistently undervalued. — Seth Godin

There’s almost no conversation about what it means to be an adult. There’s no percentage in doing so for our elders, teachers, employers, and leaders. We’re easier to manage if we’re docile and well behaved. 

That we feel entitled — especially to various goodies from the government — explains why so many of us, in our work and civic lives, talk like we’re spoiled children. That we often spend our nights and weekends in front of TVs — or getting drunk — speaks to the paucity of our courage (and the drudgery of our safe jobs). Succumbing to childlike fears, we replace the great and ennobling quests of our dreams with mere recreation.

Most of us sleep-walk our way through our careers, and now many of those careers lie in tatters. For the rest of us, it’s only a matter of time before the same fate befalls us. It’s not safe anymore. And we can’t go back.  

Something fell by the wayside as the farming past morphed into the corporate present. Those farmers had an advantage we lack.

Back then, you had to be responsible for your outcomes in an often dangerous environment. In the corporate culture, you can stay a child forever, but on the farm you had to grow up or die. 

The good news is that we can reclaim what the farmers knew. And we can use that wisdom to help us deal with an uncertain future.

That wisdom is responsibility.

In today’s uncertain, unstable work environment, we need to find within ourselves the responsible and adaptive person our forbears could invoke in troubled times. We need, once again, to become adults.

Responsibility involves being able and willing to take care of oneself, to take charge of one’s life. If we accept the challenge and take responsibility for our work lives, we will find, not danger and insecurity, but challenge and opportunity.

We need, especially, to be able to adapt to changing conditions, to roll with the punches. We need to “surf the wave we’re on.” The technology that threatens our job security also offers ways to improve our situation.

What we’ve got, today, is tremendous opportunities disguised as troubling shifts in workplace stability.

The information revolution is reversing the industrial revolution. What the industrial age did was it allowed individuals to team up in mechanized hierarchical ways to create factories and production. . . . In the future it’s all headed towards individual brands. . . . We’re all founders. We are all meant to work for ourselves. — Naval Ravikant

Here, then, are some starter ideas for navigating the roiling seas of the changing work environment:

• The career middle path: Computers and robots tend to replace human workers in areas where the task can be calculated and calibrated mathematically. Oddly, the simplest jobs are often the hardest to automate. (It’s more difficult for a machine to lift a glass of water than to play a game of chess.) Meanwhile, some of the most challenging and prestigious jobs — data analysis, disease diagnosis, factory management — are straightforward tasks for computing. Recruiters no longer prize MBA grads as much as good salespeople and entrepreneurial self-starters. Some of the highest-skill careers are disappearing, while many of the low-paying, low-skill, high-touch jobs still thrive. Safest, for now, are those mid-level careers — craftspeople, tradespeople (plumbers, electricians), sales — that require several skill sets or advanced people skills. Plan accordingly.

The 10 most difficult roles to fill are: skilled trade workers (eg. electricians, chefs, butchers, mechanics), sales representatives, mechanical and civil engineers, technicians, drivers, management/executives, accounting or otherwise financial professionals, office support staff, IT staff, and production or machine operations workers. — Daniel Burrus

• Multiple career identities: We often define ourselves by our jobs: “I’m a doctor” … “I’m a salesperson” … “I’m an artist” … “I’m a scientist”. Today it may be better to regard ourselves as people who juggle several opportunities at once. At the very least, don’t let the work define you:

• “I’m a sales person” — Instead: “I do sales work, and I’m developing some new product ideas.”

• “I’m an office worker” — Instead: “I do work for the [so-and-so] company, and I’m taking night classes and developing a home-based project.”

• “I’m a doctor” – Instead: “I treat patients at the local hospital and teach a class at the university, and I’m writing a book about medicine.” 

Think for yourself as a free agent, responsible for your own security and always on the lookout for the next great job. — Stephen Pollan

• Two part-time jobs: Many companies have responded to government demands for more full-time benefits by hiring part-time workers. We can bitch and moan about this, but we’d be behaving like kids who grouse about their unfair parents. Instead, we can invoke our inner adult and grab the opportunities at hand: 

• Two part-time jobs can add up to more money than one full-time job in the same field. 

• A couple of part-time jobs often allow for flexible scheduling, so a worker can arrange for a free day to visit the doctor (or Disneyland). 

• Workers can receive ObamaCare, so this part of the benefits is covered. Meanwhile, other bennies are effectively paid for by lowering salaries. (There’s no free lunch, kiddies. Remember: we need to grow up.)

• If you lose one part-time job, you still have the other, which is better than losing all of it at once. 

• It’s easier to replace one of the part-time jobs (if, say, you hate it) than replace a full-time bad one.

• Multiple jobs reduce boredom, not to mention the all-too-common feeling of being trapped in a 40-hour quagmire. 

Do what you can, with what you’ve got, where you are. — Theodore Roosevelt

• Multiple streams of income: It’s been said that the wealthy tend to have several sources of money. And several is much more secure than only one. The list might include:

• A main job

• A side job (instructor, sales rep, consultant, craftsperson)

• Investments: 401Ks, IRAs, savings, inheritance, etc 

• A percentage of a business you helped start

• A unique product for sale online or at stores

• A “long tail” older product that still generates a trickle of sales

• A group project — perhaps with friends, family, or co-workers — that’s growing into a money-making enterprise

I’m always looking for people who have created successful side businesses that ultimately bloomed into multiple sources of income for themselves. You can do this whether or not you are an employee, an entrepreneur, or anywhere in between. — James Altucher

• Multiple online sources of work and pay: It’s those smartphones that started all this, so you might as well take full advantage of them:

jobs.monster.com and similar websites offer clearinghouses for your job search.

Kickstarter and others provide a chance — for those of us without venture capitalists on speed dial — to raise short-term funds for start-up businesses.

WordPress.com offers free and paid web services so you can create a site to sell your products or services. WordPress claims to have over twenty percent of all the web pages on the planet. With an audience that big, it’s worth looking into.

TaskRabbit: Here you can bid to do contract work in many fields. (The website accepts only ten percent of applicants, so fill out the form carefully.) Also look into Angie’s List and Thumbtack.

Fiverr: Kind of a “TaskRabbit Lite”, this site offers quick cash for short jobs.

Craigslist: Not only can you sell all sorts of items here — your obsolete cellphone, that old desk you don’t use anymore — but you can find and make job offers, too.

Flickr.com: Here you can vend your own photos to a gigantic audience. Look also at photo-and-art sale sites such as fineartamerica.com.

Amazon Flex is hiring Uber-type drivers to deliver packages.

Handmade at Amazon: This new entrant in the home-craft marketplace will bring its huge consumer base to compete with the current leader, Etsy.

Amazon bookstore: Here it’s easy to produce your own books in electronic and print formats (I’ve published two) and present them to the world’s largest audience of book lovers. Plus there’s an in-house printing company that can produce your paperback (or music CD). Amazon also owns Audible.com, where you can sell spoken versions of your written works (I’ve produced four). [Amazon keeps getting mentions because its customer base is huge, so any product or service you post there will be seen by a zillion eyeballs.]

I should be used as a mercenary, not a lifer. – Timothy Ferriss

• Reading list for early adopters:

The End of Jobs by Taylor Pearson — “Those that don’t adapt are becoming trapped in the downward spiral of a dying middle class – working harder and earning less. . . . a shift into the Fourth Economy has made entrepreneurship the highest-leveraged career path . . . ”

The Rich Employee by James Altucher: “Participating in the Idea Economy will allow you to succeed and become wealthy right there on the job instead of thrashing in the startup slaughterhouse.”

The 4-Hour Work Week by Timothy Ferriss — “Forget the old concept of retirement and the rest of the deferred-life plan — there is no need to wait and every reason not to, especially in unpredictable economic times.”

Robots Will Steal Your Job but That’s OK by Federico Pistono — “ . . . the displacement of labour by machines and computer intelligence will increase dramatically over the next few decades . . . ”

The Black Swan and Antifragile by Nassim Nicholas Taleb — The author made a killing in 2008 by anticipating the big downturn. “In The Black Swan, Taleb showed us that highly improbable and unpredictable events underlie almost everything about our world. In Antifragile, Taleb stands uncertainty on its head, making it desirable, even necessary . . . ”

Purple Cow by Seth Godin — How to “remarkabalize” your product so it stands out from the crowd and generates its own word of mouth.

The Education of Millionaires by Michael Ellsberg — “Most of what you’ll need to learn to be successful you’ll have to learn on your own, outside of school . . . how to find great mentors, build a world-class network, make your work meaningful (and your meaning work), build the brand of you, and more.” Read a summary here.

Freakonomics and Super Freakonomics by Steven Levitt and Stephen Dubner — These engaging books on “the hidden side of everything” will help you look at economic and financial trends with fresh eyes.

“You want to be continuously learning new things and evolving what you do . . . ” — Pedro Domingos

…The disruptive business model symbolized by Uber is still in its infancy, but it can mature quickly into an adult-sized opportunity for you … if you take advantage of the changes. 

There are plenty of big problems out there that need solving, and people will pay you for results. Don’t wait for the boss to hand you an assignment; take the challenge and find some to solve. If you own the process, you’ll reap the rewards.

Our working society’s childhood is rapidly coming to an end. Most employees will resist this and try to remain in the comfortable corporate crib. You, on the other hand, can access your inner adult, zoom ahead of the competition, and move toward greater prosperity, freedom … and security.

Besides: it’ll be a grand adventure.

* * * *

UPDATE: Employment growth largest in careers that require strong social skills

UPDATE: The contingent economy rises from the ashes of unemployment

UPDATE: Corporations are still hiring

UPDATE: Where are all the young entrepreneurs?

UPDATE: Marc Andreesson on how to plan your career

UPDATE: The job search as a full-time job

UPDATE: Watson computer replaces workers


DieselGate and the Fall of VW

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Out of the blue, Volkswagen — in September 2015 the largest automobile manufacturer on the planet and a powerful and respected exemplar of corporate excellence — got caught in public with its pants around its ankles, performing unspeakable acts on its smog-control obligations. This paragon of industrial virtue had the temerity, the cheek to install a computer program that switched off the emission controls on its diesel cars during regular driving and then switched them back on only during smog tests.

The nerve! The chutzpah!

The idiocy.

In a scandal some are calling “DieselGate”, VW admits they programmed the “defeat device” code into nearly half a million vehicles sold in the US. American regulators hint that the company could face as much as $18 billion in penalties.

But wait, there’s more! Worldwide, the scandal extends to 11 million VW and Audi cars; at the same per-vehicle rate, VW could in theory be forced to pay over $350 billion in total penalties. And now private owners are suing the company for breach of contract. VW’s parent, Volkswagen Group, controls a net equity of slightly more than $100 billion, a sum that could be obliterated in a storm of penalties and damages. In other words, VW might be staring at a death sentence.

Why would so big and important a company, helmed by the best and brightest executive talent, decide to screw up so completely? What were they thinking?!? How could they not have known they’d get caught? It beggars the imagination.

With a little thought, though, this all begins to make some sense. Several clues stand out:

• There’s a history of cheating on emission controls. VW isn’t the first company to manipulate smog readouts, but it’s gotten caught in the past — and escaped with a fiscal slap on the wrist.

• Most big industries are viciously competitive. The temptation to fudge, just to get an edge, can be overwhelming. VW promised to triple its U.S. sales by focusing on diesel. Then diesel failed to live up to its high-mileage promise, so management, painted into a corner, opted to take a shortcut. Disaster ensued.

• It was a clever deceit: software, hidden deep inside a car’s computer, produces good smog control on inspection, then switches to good performance the rest of the time. The badness was completely hidden during normal operation. In the heat of business battle, the honchos at VW might have convinced themselves that their scheme would work indefinitely — that no one in government would ever figure it out. And they were almost right: the alarm finally sounded, not from a government agency, but from a non-profit and a university.

• European regulatory agencies are eager to achieve the reduced CO2 levels they can get from diesel engines, and one-seventh of Germany’s workers are in the auto industry, so bureaucrats have been inclined to look the other way on oxides of nitrogen and particulate pollution, the dirty underside of diesel. 

Diesel is the incentivized engine of choice in Europe nowadays: one third of all passenger vehicles are powered by diesels. And VW is a major player. No matter how clever its officers were, the corporation was still a big target: eventually someone, somewhere, was bound to poke around in its affairs.

• VW has a reputation for arrogance. Its culture is clannish and disdainful of American smog rules. When the Center for Auto Safety visited European manufacturers who sought to sell more diesels in the U.S., they found that VW execs stood out in one particular way: “They talked down to us.”

• It was only this year that VW finally unseated Toyota as the world’s biggest seller of cars. Toyota held that title proudly for years, and it has no skin in the American diesel game, so it’s not hard to speculate that Toyota lobbyists just might have had cause to rejoice when regulators took a harder look at VW’s diesels. The exploding scandal has hurtled Volkswagen’s stock price into a tailspin and caused consumer confidence to crater; you can bet Volkswagen’s tenure as King of the Automotive Hill won’t last long.

• And here’s the biggest, baddest reason of all: like bicycle road racers doping themselves en masse, it’s possible that all the major manufacturers are using similar cheats to overstate their fleets’ greenness. In other words, Volkswagen’s egregious violations aren’t an isolated, freak case. They may well be the tip of the iceberg.

…Can anything be done? Regulation of this industry has a history of success punctuated by embarrassing failures. Manufacturers traditionally have chafed at increased oversight; opportunities for logrolling, hand-holding, and outright fraud have been rife. When the dust settles on DieselGate, there’ll be another malefactor waiting in the wings.

To the rescue comes … all-electric vehicles. They’re cheaper to energize, they have terrific performance, and — best of all — they don’t spew the same polluting exhaust. Incentives to cheat simply vanish. 

There’ll always be bad guys. But someday, with luck, we’ll no longer have air-pollution violators to worry about. Until then, feel free to gawk like a tourist at the smoking ruins of the VW diesel venture.

* * * *

UPDATE: Scandal is an existential threat to VW, says new CEO

UPDATE: VW CEO promises all diesels will be repaired in 2016

UPDATE: VW of America CEO says he didn’t know about defeat devices

UPDATE: Defeat devices in home appliances?


A Better Conference Table

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For thirteen years we had a table in the large conference room. . . . Though it was beautiful, I grew to hate this table. It was long and skinny, like one of those things you’d see in a comedy sketch about an old wealthy couple that sits down for dinner — one person at either end, a candelabra in the middle — and has to shout to make conversation. — Ed Catmull, Creativity Inc.

You enter the conference room — a long, somewhat narrow space, windows on one side, maybe a wet bar at one end, and a gaggle of managers milling around or taking seats. The CEO walks in, followed by an assistant; they sit at one end of the table. Often someone does a presentation; then it’s questions and comments.

But every time anyone other than the boss has something to say, attendees on that side of the table must crane around each other to see better. Mostly, they give up and merely listen. But they don’t get to see the face and see the person’s certainty or hesitation or smirk or confusion. And the speaker can’t see most of the attendee’s reactions. Communication is reduced to the quality of a phone call — voice only. Many times a screen is put to use, and again everyone cranes around each other to watch.

Is there any way to fix all this? Yes. But first we must think about shapes.

The rectangle creates sight-line problems:

Attendees can’t see each other. This makes conversation harder and reduces the flow of ideas.

A circular table creates ideal sight lines, but it’s an awkward fit in a long, narrow conference room. And it’s less clear who’s in charge of the meeting.

A long, oval table, on the other hand, solves both problems neatly:

Now everyone can see everyone. Conversations flow smoothly. And the leader is still at one end, overseeing the meeting. Here’s an example.

What about media? Here are three strong options:

1. Screen at far end of table:

This is the cheapest approach, easiest to set up, and easiest to move around. Note that attendees at the screen-end of the table slide back a bit so people behind them can see without craning. 

A more expensive option is an oval table with a flat edge at the screen end.

2. Screens installed above and behind long sides of table:

Each attendee can view the screen opposite without anyone moving. (The chief can watch either screen.) More expensive, less flexible during a minor room remodel.

3. Tabletop central monitors facing outward:

Like those sit-down conferences on the Starship Enterprise, the screens project outward from the table’s center; attendees view the nearest convenient screen. It’s more expensive but also more involving, as participants can interact with each other while viewing.

4. Screens built into table surface: The future is here now, if you’re willing pay extra:

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…Bear in mind that politics can be dicey in any organization, and conference leaders may feel the need to squelch discussion. In that case, they’ll likely prefer rectangular tables, which constrain attendees to focus on the leaders. But if the aim is creative problem solving (and damn the political torpedoes), an oval shape will encourage more lively discussions.

For a wide selection of table designs, simply Google “oval conference table”, click on images that appeal to you, and visit the various retailers.


Great Product, Not-so-Great Marketing

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Ever been in a conversation with several people and you remember a story that’s perfect for the topic at hand? And you can’t wait to tell it? The group is lively, people are chiming in one after another, and by the time you can get a word in, the talk has moved on to other topics. Still, you insist on telling the story. And it falls flat.

It’s Spring 1977, and I’m in a movie theatre. A commercial for an upcoming film — a “trailer” — appears onscreen. It’s all explosions and weapons fire and hurtling spaceships and strange alien creatures and weird robots. I was totally hooked. I had to see it. When it opened I was among the first in line. The movie was “Star Wars”, and it was everything the trailer had promised and more. I saw it five times in the first week and many times thereafter. That first trailer, with its invitation to hyperactive adventure — not to mention vivid images drawn from the many sci-fi books I’d read as a kid — totally captivated me. As history shows, I was but one in a ravenous audience of millions.

Decades later I saw another trailer for the latest sci-fi flick, and it, too, was jam-packed with the same rush of action and quick cuts. This time, though, I had a completely different response: “Yeah, we’ve seen this a hundred times. But what the hell is the movie about?” 

The film was “John Carter”, and apparently it was based on the old Edgar Rice Burroughs adventure novels about a man who’s transported to Mars, where he gets caught up in a civil war. But the trailer was a dizzy mess that left me with “Huh?” I decided to wait for the DVD.

The film flopped so badly it shook the Disney studio and caused a storm of criticism and second guessing in the media. CEO Robert Iger had to issue strict directives to his staff not to start pointing fingers in public at each other.

Months later, not sure what to expect, I screened “John Carter” for myself. To my surprise, I was delighted with it. The story was a classic rollicking adventure. The actors performed ably, and there was strong chemistry — and comic banter — between the two leads. (The heroine, played by Lynne Collins, might have sashayed out of a sizzling Boris Vallejo fantasy painting.) Effects and animation were top-notch. Production values were high: “The money was up on the screen,” as they say. The music was gorgeous and compelling. In short, the film carried me away to a romantic fantasy adventure on the Martian plains. 

This movie should have been a huge hit. What went wrong? Fingers pointed at everything from the film itself (“a bit cheesy”) to the lead, Taylor Kitsch (“stolid and dull”). Those accusations rang false to me, given my experience viewing it. And others suggested the problem lay in the marketing.

For one thing, the working title had been “John Carter of Mars”, but the Disney brass — stung by the recent flop of their animated feature “Mars Needs Moms” — renamed it simply “John Carter”. This took away much of the huge sci-fi audience, especially those who knew and admired the famous source material.

Recently I chatted with someone who’d been involved in distribution of “John Carter”, and he said flatly, “The marketing director didn’t know what she was doing.” Interesting. 

I kept looking. Turns out both the marketing chief and the studio head were new, and neither had ever before worked in film. Uh-oh. Meanwhile the director, Andrew Stanton, had lately moved across the hall from a hugely successful career directing animated features for Pixar. “John Carter” was his first essay in live action. Hmm.

Granted, “Carter” required more than a thousand animation shots, so Stanton wasn’t exactly the wrong choice. And, judging from my own experience, the resulting movie was well made and entertaining. But Stanton’s was the biggest name in the production, and he encountered a studio power vacuum. He ended up calling the marketing shots.

His idea for advertising was to revive the fast-action flurry of quick cuts like those game-changing “Star Wars” theatre trailers. He wanted the audience to relive his own youthful excitement — and that of anyone else who could remember back thirty-five years — or discover it anew if they were young enough. He wanted the thrill of the “Star Wars” promos to waft over his own film.

There were three problems with this idea: (1) anyone old enough to relive that thrill was now probably too old for the film’s demographic; (2) anyone young enough had already seen hours of such action sequences (*yawn*) in movie trailers; and (3) the film suffered from pre-release bad press, but Stanton plowed ahead, his marketing strategy unchanged. Disaster ensued.

In other words, the movie’s promotional campaign was like a great old story Stanton just had to tell, but the crowd had moved on. 

There’s talk of rebooting the John Carter series under another production team. That’s kind of sad, since the first film was terrific, while its biggest problem was the promotion. 

Let’s review:

• DON’T let a strong department push around a weak department

• DON’T hire inexperienced people to run marketing

• DON’T let your artists, even the superstars, make business decisions

• DO step in when staff is squabbling

• DO let everyone have input

• DO let department heads win arguments involving their own turf

Of course, it’s easy to Monday-morning quarterback a failed launch. And, as Oscar-winning screenwriter William Goldman said about predicting Hollywood hits, “Nobody knows anything.” There’s no good way, with any given film, to tell exactly which part of the moviemaking process — the story, the acting, the directing, the cinematography, and of course the marketing — will make the biggest contribution to success or failure. In a print ad you can alter a single word and response rates may change enormously. How much more tenuous must be the decisions made in promoting a film via its trailer?

And there’s always that ineffable something that can empower a work of art to capture the public’s imagination. Besides, many things happen to a movie offstage, things that can change everything, things we never find out about.

But, people! There’s no sense in spending hundreds of millions on a movie production if the marketing department is on vacation. Let the director direct, and let marketing market.