My partner Albert talked about the future of work at the DLD conference last week. Here’s the video of it.
Posts from employment
I was on the phone last night with Stephen DeWitt, the CEO of our portfolio company Work Market. He was talking about a specific community of people and I asked him how many of them were likely to be freelancers. He said “well the statistics say that 3 to 4 out of every ten people these days are freelancers.”
I thought that sounded high but after reading Mary Meeker’s Internet Trends Report, in which she says that “34 percent of the work force in the United States, 53 million people, now consider themselves independent contractors, short-term hires or other kinds of freelancers”, I think Stephen has it exactly right.
Look around you on the subway, the baseball park, the movie theater, 3 to 4 out of every ten people are freelancers. That’s a big number. And its growing pretty rapidly. Younger people are more inclined to be freelancers. Older people turn to freelancing for flexibility or economic necessity. And employers are more inclined to hire freelancers as technology makes the management and compliance requirements around freelancers easier to handle.
The biggest section of Mary’s report, some twenty or thirty slides if I recall, was on freelancers and the “on demand” economy. Technology, the Internet, mobile devices, and the communications and financial systems that have been built across all of these technologies is making freelance work easier and easier to issue and easier and easier to do.
When I got home last night for dinner, my son and his friend were checking out jobs on care.com. When I was their age, finding work was a manual process. Now you just pull out your phone, scan your feed, and get some work.
It’s a new era we are living in and the nature of work is changing and changing fast. There are tons of opportunities in and around this trend and we are invested in some of them. It’s one of the big megatrends of this century.
Brittany posted today about the first USV portfolio diversity summit. Last year we had forty-two portfolio summits all driven by topics that bubble up from our portfolio. Diversity has been rising as a topic that people want to talk about and we reacted to that by hosting a summit on it. We had 28 attendees from 13 different portfolio companies in attendance.
In Brittany’s post, she cites two important reasons to strive for diversity on your team:
- Do you want your company to increase your company’s competitive advantage? Extensive research has proven that more diverse perspectives leads to more innovative ideas and better financial returns.
- Do you want your company to one day serve millions of people? It helps if you know how different people in the population think. If companies want to last, they need to think about this early.
She goes on to outline how the portfolio companies are approaching diversity:
- Getting Started: having the discussion, language, and online tools
- Company Culture: embracing diversity, inclusive mission vision values, and performance
- Recruiting: tactics, expectations, interviews, job postings, resources, and external organizations
- Constant Evolution: Feedback, measuring success, training, and materials
If you are seeking to build a diverse culture and team in your company, I would encourage you to read Brittany’s post which she will follow with dedicated posts on all four topics in the outline.
I am a capitalist. Contrary to the occasional community members who call me a socialist or a techno communist, I believe wholeheartedly in the power of markets to efficently determine what's best in most cases.
But I am not an absolute capitalist. I believe that markets do break down from time to time and we need to recognize when those things happen and do something about it. The labor movement, when it was not corrupt for the most part, is an example of a societal response to a market breakdown.
When we stare into the future, we see that our cars will not have drivers. We see that the stuff we buy from Amazon will be delivered by drones. We see that the foundations and structures of our homes will be built by 3D printed concrete. We see a world where many jobs will not exist anymore. Taken out by technology. The very technology that many of us here at AVC are working hard to create and that many of us here at AVC celebrate.
My partner Albert has been talking about this on his blog for a long time. If you want to see the totality of Albert's thinking on this topic, read the economics tag on his blog. One of Albert's thoughts is that we may need a basic income guarantee to redistribute the consumer surplus we will be creating when we no longer have to pay for drivers, delivery people, and construction workers in our lives (and many others). He's now doing a research project to look into this idea in greater detail and is looking for a research assistant.
But Albert is not the only one thinking about this stuff. Bruce Bartlett, a senior policy advisor to the Reagan and Bush administrations wrote a piece in the NY Times earlier this week advocating for a basic income guarantee.
And if you haven't read David Simon's rant on this topic in the Guardian, I would suggest you do.
I am not sure about the basic income guarantee. It feels like welfare to me and that system destroyed many productive lives. People need to work. They need to have something to feel good about doing every day. Work is a big part of self image and self worth. Any system that makes it possible for people to sit at home eating bon bons (as the Gotham Gal likes to say) is not a good system.
That said, we do need to recognize that technology is taking massive costs out of our collective P&Ls and creating a large surplus for many of us. At the same time, the people who made up that cost structure are out of work and struggling to put a roof over their head and feed their families. Shouldn't that surplus, at least part of it, go to assisting those people?
So I welcome this debate and I will not be principled on this point. I will not let ideaology and orthodoxy drive my thinking here. And I don't think anyone else should either. Because this is an important discussion to be having. And not just for the US, but for the entire world.
It's labor day, a day we celebrate the labor movement and the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of the US (from wikipedia). As Obama has said many times, a job is something that everyone needs. It is about pride and self image as much as it is about money.
But we've been losing jobs in the US for years as the manufacturing based economy recedes and relocates and the new industries we are all hoping for are not creating jobs fast enough to replace those that are lost.
The central question, it seems, is whether these new industries will employ people in the same ways and at the same rate as the lost industries. I fear that they will not. And I am certain that they will not employ unskilled labor at the same rate as the industries we have lost. Software engineers, designers, writers, analysts, etc should be in strong demand for as far as my eye can see. But those who do not have specific skills are in for a much tougher job environment and have been for quite a while.
I am not sure exactly what to do about all of this other than work like hell to make sure as many of our young people have access to the kind of education that will give them the skills to do the work of the future. As you all know, I am working on that. And so are many others. The good news is that many people realize that's what we need to be doing.
But will that be enough? I don't know. I am not sure anyone does.
Here's what Andy Kessler thinks
Here's what Mark Sigal thinks
Here's what my partner Albert Wenger thinks (he thinks a lot about this issue)
I am curious what you think.