“While our first instinct is usually attempting to push harder, it’s more valuable to figure out where to push.”
The End of Jobs Short Summary
The End of Jobs by Taylor Pearson argues that the leverage points in creating wealth have changed because of globalization. Because this tendency is accelerating, it offers a massive advantage to entrepreneurs. We’re experiencing a shift in our economy, and jobs are being replaced by software. When the time comes, you want to be the one with the software, not the one with the job.
We Have Reached the End of Jobs
“Jobs” vs “Entrepreneurship”:
- A job is following the operating system someone else created
- Entrepreneurship is connecting, creating, and inventing systems
As a society, we’ve hit peak jobs.
This is because:
- Many of the jobs are going overseas
- Or being replaced by machines
- And the value of a degree is dropping
So don’t ask “How do I get a job doing that?”. Instead, ask: “How do I create a job doing that?”
People who are limited to simply follow instructions cannot create growth in a business. What’s scarce and more in demand is people who understand and operate in complex and chaotic systems.
And those people are entrepreneurs.
Theory of Constraints (from The Goal): any system with a goal has one limit. It’s a waste of resources worrying about other things outside this one limit. You have to identify the limit and improve on it until it is no longer the limiting factor.
To improve the outcome of a system, stop pushing harder on a short lever. Find out where to push to produce maximum impact. The limit today is entrepreneurship.
We are at the end of jobs, and the world is shifting from the Knowledge economy to the Entrepreneurial economy.
The Entrepreneurial Economy
Entrepreneurship is a skill set that can be acquired and a resource that can be invested in. You can’t measure entrepreneurship but you can invest in it with life decisions.
- Choose an apprenticeship in an entrepreneurial company over a “safe” job in a big corporation.
- Take ownership of a complex project that can develop your skillset
Mediocristan vs. Extremistan:
- Mediocristan is that safe place where normal, expected things happen and whose probabilities of occurring are easy to compute. It’s the middle of the Gaussian bell curve, one followed by biological systems, and where the middle-class exists.
- Extremistan is a world where we experience extreme conditions and nothing can be accurately predicted. Unlikely events (Black swans) occur frequently and have a massive impact.
Many of us base our life choices as if we were living in a predictable Mediocristan. This false sense of security is dangerous.
Having a steady, secure job seems safe. But an accountant putting in forty hours per week at a steady job accumulates silent risk.
The silent risk here is:
- Believing his income is steady value creation. In fact, he can be replaced anytime by an accountant overseas doing the same work at a fraction of his salary.
- Not building the skill set he needs when he loses his job
- Being used to following instructions, so he doesn’t have the ability to build systems or rapidly adapt to entrepreneurship
Large amounts of volatility can kill you, but moderate amounts of volatility can help you thrive. Taking a path without risks or variations (ie. a job) can actually be the most harmful thing you can do in Extremistan.
The more quickly you comprehend what Extremistan is, the more protected you can be.
How to Thrive in Extremistan: Be an Entrepreneur
- Entrepreneurs get constant feedback, thus the risk is more visible.
- Not making money is feedback in itself. Once you start a business, you can adjust your product and marketing until sales improve.
- For an entrepreneur, the days you go hungry are the days that you learn the most.
- As you go on the journey, you get better and you gain skills.
- You build a network of other entrepreneurs that can help you in the future.
- Create systems and can change them to improve results.
- Develop an important skillset: dealing with risk.
In Extremistan, entrepreneurs will be better equipped to deal with risk than someone in a job. Entrepreneurship, which was once risky, is becoming safer.
Entrepreneurship Is More Accessible because of The Long Tail
“The Long Tail”: significant profit can be made by making non-popular items available to more people, instead of trying to break into the mainstream market of selling large volumes of a smaller number of popular items.
This makes entrepreneurship more accessible because:
- Product creation costs are decreasing. It’s easier and cheaper than ever to make something. Even with little to no capital, entrepreneurs can start and run a business from anywhere in the world using free or cheap tools
- Everyone is a media company. It’s so easy to reach various markets. You can communicate directly and more effectively with your target market through your chosen platform
- New markets are created every day. The internet has made geography irrelevant, revealing new markets and businesses every day. There’s an increasing number of people to sell products to. Today, we can serve markets that traditionally couldn’t be served.
New markets create new markets. A bigger marketplace, like Craigslist, gave birth to AirBnB, which targets a more specialized market.
Opportunities like this increase rapidly. And here, jobs are replaceable by software. When that time comes, you don’t want to be the one with the job—you want to be the one with the software.
How to Wade into Entrepreneurship
Entrepreneurs need relationships and skillsets.
- Relationships/ an entrepreneurial network: helps you see new business models, uncover new opportunities and allow you to get and give support.
- Entrepreneurial skillset: A bit more nuanced and falls in the “Complex” category in the Cynefin framework. These skills cannot be learned other than by actually doing them.
Two ways to get started on an entrepreneurial track.
- The Stair Step Method. Have an ambitious goal but start with a small opportunity and use this to build your skillset and network
- Apprenticeships. Find a person doing what you’d like to do a few years from now. Offer to work for them and bring results. In return, you get intensive training on how their business works.
Apprenticeships offer you something that credentials or a degree cannot, like:
- Entrepreneurial relationships – Starting entrepreneurs don’t need an idea, they need relationships.
- Become more effective in complex environments – Being with an entrepreneur allows you to watch and learn
- Play with house money – You get paid to learn skills and build a network
Advantages of Apprenticeships to Entrepreneurial Companies:
- Less risk for employers – Apprenticeship programs let the company structure their plans on people being there for two to five years
- They attract higher quality applicants
- They build an alumni network of smart, ambitious people
Entrepreneurship Is More Profitable Than Ever
The traditional job-based model of work, “Do X, get Y” is no longer effective today. Complex work, like entrepreneurship, is more valuable and more aligned with the human drive.
Three core motivators: money, freedom, and meaning.
Money is just a proxy for material wealth. It becomes less motivating after a certain point.
Freedom and meaning aren’t something to be put off until you’re rich; they’re actually something that can help you get rich.
More Money: The Economics of Entrepreneurship
It’s easier more than ever to create wealth today than in the past.
“Jobs (The Slow Lane)” vs. “Entrepreneurship (The Fast Lane)” (from The Millionaire Fastlane by MJ Demarco)
- The slow lane: Jobs, a path that most people are raised to see.
- The fast lane: Entrepreneurship, the path not many people see, yet one that’s easier, safer, and more profitable.
The Fast Lane Formula: Wealth = Net Profit + Asset Value
Those terms are defined as: Net Profit = (Units Sold) × (Unit Profit)
Asset Value = (Net Profit) × (Industry Multiplier)
Fast lane principles:
- The unlimited upside – No limits to control and variables, which helps you increase net profits
- Assets are more valuable than cash – Net profit reflects the value of your business as an asset
A business that has a 2x multiple means that it is worth twice the net profit it generates.
In a job, if you get a raise of $50,000 a year, it’s great but it’s simply cash.
In a business, if you generate an extra $50,000 in profit, it’s not just cash, it’s also an additional $100,000 in asset value because of the 2x multiple. If a company buys your business, the asset value dictates the selling price.
Expected Value: “the sum of all possible values for a random variable, each value multiplied by its probability of occurrence.”
Entrepreneurs take the risk of losing a hand worth thousands of dollars, so long as they understand the probabilities and bet accordingly.
While success is not guaranteed for every single opportunity, pursuing opportunities with a positive expected value increases the chance that you’re going to succeed over time.
More Freedom: Choice Over Obligation
The kind of work that will create wealth for us and others does not come from obligation, but from freedom. Today, it’s possible to design our own lifestyle the way we want it.
Entrepreneurs are powerful because they can design both their own and others’ reality. He defines his reality and constantly asks “why” or “why not,” instead of “how” or “what.”
An entrepreneur empowers others to be freer by creating more wealth
More Meaning: The Final Key to Wealth
“Flow”: the natural human desire to grow and stretch.
Entrepreneurs cultivate happiness by seeking “flow,” striving to stretch skills, and reaching up for higher challenges. Seeking meaningful work that we freely choose unleashes creativity and innovation. This is what makes entrepreneurs valuable.
However, work as an obligation counters our inherent tendency to grow. Complex entrepreneurial work is scarce because jobs have programmed us to stop striving and start shrinking.
This lack of meaning can be solved by pursuing a goal greater than ourselves. Once we do this, we start to produce more valuable work, become happier, and make more money.
For the first time in history, our natural drive to grow by working on things that interest us is becoming more economically valuable.
Today, entrepreneurship can give you the power to design your life. Now you have to ask yourself, “What’s my legacy?”
A vast amount of capital, opportunity, and possibility is available to us like never before. But we must reach up and seize it! It’s the end of jobs but many of us are still stuck in the traditional job paradigm.
Never before have we had the tools at our fingertips to write and design our life and our future. Stop underestimating yourself and start writing your future. Start now.
“The first rule of career planning: Do not plan your career. You can’t plan your career because you have no idea what’s going to happen in the future.”
It’s better to focus on improving your skills and pursuing opportunities than planning your career, especially in this fast-changing world.
Plan your life 90 days at a time.
- This is the time frame where “ambition and planning actually fall reasonably close together.”
- Gives you a good idea of what you can get done in that period
- Allows you to take stock of what opportunities are available right now and give you ample time to capitalize on them
Start a project. Launch a business. Once you start doing, new opportunities will arise, and you can re-evaluate in ninety days whether they’re the right path to take.