My last blog post focused on frugality as one of the key components to building long-term wealth. Taylor Pearson contends in his book, The End of Jobs: Money, Meaning and Freedom without the 9-5, that entrepreneurship is another way to amass wealth. In fact, a common theme emerges among the business books I read. Many entrepreneurs start businesses to solve a problem or fill a need in the marketplace. Or, like Steve Jobs, they create demand for something new – think smartphones and tablets. Regardless, the work they do matters. Plus, there is no cap to an entrepreneur’s earnings.
Pearson defines entrepreneurship as “connecting, creating, and inventing systems – be they businesses, people, ideas, or processes.”
A job, however, is “the act of following the operating system someone else created.”
From the beginning, Pearson touches on some important points.
1. We could very well be at the “end of jobs”.
Pearson argues that “largely abundant, high-paying jobs that characterized the second half of the twentieth century” are gone. In fact, non-routine cognitive positions are the only growing job segment. Traditional university degrees from the bachelor to PhD level are plentiful, essentially decreasing their value.
2. Globalization is both a curse and a blessing.
Pearson describes the rise of micro-multinational companies, small entrepreneurial endeavors that can source talent globally for a fraction of the price they’d find in the U.S. For U.S.-based workers in traditional jobs, this is scary. Yet this is the world in which we live; entrepreneurs who are willing to embrace this opportunity could experience tremendous growth.
3. Entrepreneurs operate in a different domain than traditional employees.
Pearson refers to Dave Snowden’s Cynefin framework, separating work into distinct domains: simple, complicated, complex, and chaotic. He contends that many traditional workers live in the complicated domain. This is where the “relationship between cause and effect requires analysis and investigation” but can be solved through existing measures.
By contrast, the complex domain is emergent, where many entrepreneurs find themselves. Here, the relationship between cause and effect is only clear in retrospect. Chaotic domains have “no relationship between cause and effect. We must act in spite of the disorder, to develop ways to survive.” The demand for people operating in the complex and chaotic systems as entrepreneurs is higher than ever before.
Section II of The End of Jobs is the most fascinating part of the book to me. He examines history to show how power changed hands. Pearson analyzes dominant institutions and players, in addition to limits that inhibit growth.
Later in the book, Pearson declares that entrepreneurship is safer than ever. Alan Moore, co-founder of XY Planning Network, agrees. In a recent podcast interview, Alan felt the path to entrepreneurship was less risky than the alternative: giving an employer complete control over 100% of your earnings. I see his point. In a product-based business, one customer isn’t going to dictate whether your business stays open or closes permanently. However, the struggle is real for service-based businesses with a single client comprising 50% or more of revenue. In these cases, exert enormous effort into diversifying your client base; otherwise, you’ll be left with nothing if that client walks away.
While I agree with many of Pearson’s arguments philosophically, I’m not sold.
Not everyone is designed to be an entrepreneur.
Take my husband Bryan, for example. He is hard-working and committed to grow professionally and personally. However, he doesn’t yearn for the entrepreneurial lifestyle. He enjoys making a valuable contribution to a larger organization. He finds meaning in the 8-5 and works for a company that is growing. The lack of freedom doesn’t bother him so much.
Maybe Bryan and others like him can create an “intrapreneurship” model within a larger, established company that promotes risk-taking and fresh approaches. Or he could serve an important role in a new, fast-growing small business.
Jim Collins’ book Good to Great discusses the powerful transformation of some businesses while others stay stagnant. He argues it isn’t just about leadership; rather, great companies understand the importance of getting the right people on the bus (in the right roles). Will you seize the opportunity to get the right people on your team?
Which individuals will move your business forward in the future?
Please reply in the comments below.
Deb Meyer, CPA, CFP®
P.S. Are you more of a “Bryan”? If so, be sure to read next week’s blog post. I’ll explain in detail how you can build long-term wealth and remain an employee.