The End of Jobs - Book Summary

Discover the enthralling shift in the world of employment and the rise of entrepreneurship.

We all grew up hearing the same mantra - get a good education to secure a good job. This traditional belief seems deeply ingrained in us. But, given today's world where obtaining a college degree is more common than ever and global connectivity is at an all-time high, is this notion still valid?

Something undeniably significant has shifted. In this globalized, interconnected era, the conventional job no longer seems to be the secure financial haven it once was. From the rise in outsourcing to swelling ranks of jobless college graduates, it may feel like an economic downturn. But could we be actually experiencing the twilight of an outdated system, witnessing the dawn of a new order? Could we be observing a profound shift in paradigms, signaling the demise of traditional jobs as we've known them?

In this narrative, you'll delve into

how King Henry VIII of England elevated the importance of capital over land;

why successful entrepreneurs channel the mindset of poker players; and

how the growing U.S. population has contributed to heightened unemployment rates.

Breaking through the barriers: Understanding how limitations shape societal evolution.

Progression in society is shaped by countless factors, one of which involves understanding the constraints inherent in our everyday systems. This concept of limitations was brought to light in the 1980s by software entrepreneur Eli Goldratt's theory of constraints.

Goldratt posits that every system oriented towards a goal is also restrained by a limitation that curbs its growth potential. Let's assume your factory runs two assembly lines churning out a hundred units each, but there's a third one producing only fifty. That underperforming third line represents your constraint.

For tangible progress, it is crucial to address and mitigate this limitation. Consider, if you have an innovative product, but its existence remains unknown, enhancing the product further will not spike your sales. The real bottleneck here that needs attention is your marketing approach.

In the context of systemic progression, systems thinker Ron Davidson cites the last three transformative shifts in the Western economy as instances of changing limitations.

During the fourteenth-century in England, the agrarian economy's pivotal resource was land. The Catholic Church, as the leading landowner of the time, essentially dominated the economy. Thus, land was the reigning limitation until the sixteenth century when King Henry VIII took control of the Anglican Church from Rome and reshaped the scenario.

The industrial revolution of the 1700s marked the next shift, where the influence of financiers outstripped that of monarchs. The limiting factor transitioned from land to capital, compelling landowners like Prussian King Friedrich Wilhelm III to seek loans from bankers to fund his wars.

Fast forward to the 1900s, and we witness another shift: from a capital-dominated economy to a knowledge-intensive one. In this new landscape, technological advancement and knowledge propagation became the reigning limitations, catapulting companies such as IBM into positions of immense power. A case in point is IBM's successful billion-dollar bond issuance in 1975, despite opposition from their bankers at Morgan Stanley.

However, since the dawn of the 21st century, there's been a perceptible weakening of the knowledge economy. In its place, a burgeoning entrepreneurial economy is gaining traction. Let's delve deeper into the reasons for this shift.

The changing tides: From degree-centric success to the rise of entrepreneurship.

Jobs, once seemingly abundant, are becoming scarce. Surprisingly, the current generation in their fifties are partly to blame for this.

Post-World War II, an economic boom stretched the limits of the knowledge economy, sparking the transformation into a new system.

Those born in the United States during the two decades following World War II — the so-called 'baby boomers' — relished a period of economic prosperity teeming with career opportunities. As per the U.S. Census Bureau, job growth outpaced population growth by 1.7 times between 1948 and 2000.

This surge meant that baby boomers only needed a college degree and the right qualifications to step right into a job. Subsequent generations trod the same path, expecting a similar outcome. But it was never assured that the economy would remain static. As it turns out, it hasn't.

In fact, since 2000, population growth has outstripped job growth by 2.4 times, resulting in a surplus of highly educated, unemployed graduates. In the United States, over half of recent college graduates are either jobless or employed in roles that don't necessitate a degree. This trend signifies that academic credentials no longer provide the advantage they once did. We seem to have reached the zenith of the traditional 9-to-5 job structure, standing now at the threshold of the entrepreneurship era.

Interestingly, the only job sector witnessing growth since the 1980s comprises non-routine cognitive jobs — roles that demand creative, unpredictable tasks rather than monotonous, repetitive work.

Our economy is now steering towards creativity and innovation. Simply put, creativity has emerged as the new constraint and the emerging powerhouses are entrepreneurs who launch businesses and pioneer groundbreaking ideas. A fitting example is the apartment rental service, AirBnB. They creatively utilized an external platform, Craigslist, which lists apartments, to market their own business.

The great job exodus: Outsourcing and mechanization present challenges and opportunities.

The dwindling job availability in the U.S. is not the sole difficulty faced when seeking employment today — outsourcing is another considerable factor.

Contemporary communication technology coupled with the rise in global education has shattered the barriers of office spaces. The number of individuals holding university degrees has surged, eroding their value significantly. In fact, the count of college graduates worldwide leaped from 90 million in 2000 to 130 million in 2010. What's the implication here? When combined with technological advancements like video conferencing services like Skype, this trend enables hiring and remote work from anywhere across the globe.

Furthermore, this allows companies to employ talent from regions with lower wage standards.

Consider an English-speaking web designer from the Philippines, who could be hired for an annual salary between $700 and $1,400. This contrasts starkly with the expected salary of approximately $82,000 for a similar role in the U.S.

Technology isn't just replacing humans in blue-collar jobs. Machinery and software are increasingly carrying out tasks previously performed by human beings, even in knowledge-based roles. For instance, Eventbrite, an online ticket selling platform, conducts its bookings and payments entirely via software.

So, what's the solution? Instead of waiting passively for software to replace you — seize it.

Modern technology has made the cost of running a business more affordable, enabling more individuals to become entrepreneurs. They can operate small companies utilizing a global pool of talent at relatively low expenses. Such startups are often referred to as micro-multinationals.

An illustration of this is Jesse Lawler, who runs Evil Genius Technologies, a software company based in Vietnam that employs personnel from England, India, the Philippines, and other nations. Lawler's sales and customer service staff are located in the U.S., while his programmers are in Vietnam.

This arrangement allows him to drastically slash his expenses: living costs alone would render hiring more than two developers in the U.S. unfeasible.

For an aspiring entrepreneur, contemporary technology opens a world brimming with opportunities.

The surprising truth: Being an entrepreneur in today's world is often more lucrative and secure than a traditional job.

The allure of a stable job has been ingrained into our psyche since childhood. But, could it be that we've been fed a fallacy?

Holding a steady job today potentially exposes you to a hidden peril that is entirely beyond your control. Our present economy carries a volatile edge: your stable income could vanish in an instant, leaving you stranded without a backup plan.

Your monthly paycheck gives you a deceptive veil of safety, and you could easily be replaced by an equally proficient worker in India ready to work for a fraction of your salary. It's a brutal fact but, if you've spent your entire career following instructions, you won't possess the skills to create alternative paths for yourself. It's akin to what's known as the 'Turkey Problem': you resemble a turkey that's been fed every day until it's abruptly sent to the chopping block!

Entrepreneurs, on the other hand, don't face this predicament. They tackle overt risks head-on. While immediate profits may be elusive, they gather skills, formulate systems, and can modify them if the outcomes aren't satisfactory.

In essence, they have unfettered control and infinite variables at their disposal, and the scope for growth is immense. Several entrepreneurs the author conversed with admitted that they would be disillusioned with an annual growth rate of merely 20 percent.

Entrepreneurs, much like poker players, are well-acquainted with the concept of expected value — the average value expected from a series of random variables occurring repeatedly.

Imagine you're in a poker game and it costs you a thousand dollars to see the final card. You know there's a 20 percent chance of winning twenty thousand dollars for the entire hand. So, you're staking a thousand dollars against an expected value of four thousand dollars, which is 20 percent of twenty thousand dollars. If you place this bet enough times, you're bound to emerge victorious. It's no wonder, then, that many poker players gravitate towards becoming entrepreneurs.

Entering the digital age: Modern technology has made it easier and safer to venture into entrepreneurship.

The general perception is that starting a business is an endeavor reserved for business geniuses sitting atop mounds of wealth. However, thanks to advances in modern technology, opportunities for entrepreneurship have opened up to virtually anyone, from furniture designers to novelists. Steve Jobs, the renowned co-founder of Apple, even professed that entrepreneurs aren't necessarily more intelligent than the average person.

A game-changer in the world of business is, undeniably, the internet. It has significantly reduced production costs and made tools for creating a product more affordable and accessible than ever before.

Consider Software as a Service, where companies like Adobe Creative Cloud offer software on a subscription basis. In the past, you'd have needed to invest heavily in expensive equipment and tie yourself to long-term contracts. Today, quality services can be subscribed to on a monthly basis. For instance, instead of shelling out hundreds of dollars on accounting software, you can opt for a service like Xero, which offers their accounting program for just nine dollars a month.

But the internet's impact doesn't stop at reduced production costs — it has also dramatically lowered distribution costs. Aside from enabling you to engage manufacturers in countries where production costs are lower, the internet also allows you to reach and distribute to customers directly.

The author shares an instance from his experience where he worked for a company that manufactured and sold portable bars. By leveraging manufacturing capabilities in China and distributing directly to consumers, they managed to cut costs by approximately 25 percent while enhancing the quality of the product.

Furthermore, the internet continuously spawns new markets, largely due to location becoming increasingly insignificant. In the old days, you would opt for a law firm located nearby. Now, you can use platforms like UpCounsel to connect with a verified lawyer specializing in your specific needs, regardless of geographical boundaries.

If you're an entrepreneur, the internet has also made it feasible to cater to niche markets. For instance, Firegang Dental Marketing offers digital marketing services explicitly geared towards dentists looking to attract new clients.

Stepping away from obligation: Entrepreneurship offers the freedom to work on what truly matters to you.

Our prehistoric ancestors, the hunter-gatherers, didn't toil like we do today: their labor was solely for survival. This scenario dramatically shifted at the dawn of the agricultural revolution when work became a binding duty.

As farming communities emerged, people labored intensively to gather food that could be stored or bartered. Tending the land wasn't about survival anymore; it was relentless work aimed at accumulating wealth.

With the advent of the industrial revolution, factory workers saw labor and wages as avenues to elevate their standard of living. Thus, they tolerated the monotony of routine factory tasks in the hope of a better future.

This notion might resonate with you because it's still deeply ingrained in our society.

However, the modern era has brought the promise of more meaningful work. But, how do we balance the scales between meaning and money? To investigate this, Economist Dan Ariely undertook a psychological study in India to gauge the potency of money as a motivating factor.

In Ariely's experiment, workers were given intricate tasks that couldn't be solved by applying a standard formula, much akin to the nature of entrepreneurial work. For instance, one task involved unscrambling an anagram. One subgroup was promised a day's wages for accomplishing the task, the second group was offered two weeks' wages, and the third stood to earn five months' wages. Remarkably, the performance diminished as the rewards escalated. This suggests that the quest for meaningful work often triumphs over monetary incentives.

This notion was further reinforced in 2006 when Yahoo proposed a $1 billion buyout of Facebook. However, Mark Zuckerberg declined without a second thought. Why? His work held immense personal value to him. Fast forward to 2015, and Facebook was worth a staggering $230 billion. Zuckerberg not only continued doing what he loved, but he also reaped enormous financial rewards.

This evidence further substantiates that initiating a business that satisfies our inner cravings is far more attainable than traditional wisdom might suggest.

Step up your game: The Stair Step Method to venture into entrepreneurship and establish your own business.

While entrepreneurship can be challenging, it isn't necessarily as perilous as you might imagine. Rob Walling, the helmsman of three thriving software companies, developed a beneficial entrepreneurial model known as the Stair Step Method based on his personal experiences.

The initial step entails developing and launching a single product, selling it at a one-time cost, and utilizing a solitary marketing channel.

Adopting this minimalist approach enables you to learn some essential business fundamentals without being overwhelmed by a fiercely competitive environment. You'll master the skills of product development and marketing, networking, and managing a small team of employees.

The subsequent step involves releasing enough one-time products to allow you to leave your regular job — just as Walling did before transitioning into a computer programming consultant. In 2005, he introduced a few products and took over some invoicing software that was still in development, but his monthly income was just a few hundred dollars.

At this juncture, your goal should be to generate sufficient income to compensate for the time spent on your day job. This step would concurrently allow you to amass business experience, build a network of entrepreneurs, and stabilize your workforce.

Walling honed his marketing skills by simply extending the SEO strategies implemented by the prior owners of the software. He leveraged the capital from his consulting pursuits and his newfound SEO capabilities to buy and manage an e-commerce website selling bath towels.

After launching a few products and accumulating some experience, the next course of action is to broaden your business scope. You could unveil larger products or establish a membership site. Following the acquisition of the towel-selling website, Walling boosted the company's profit from nothing to $2,500 per month.

It's crucial to note that entrepreneurship can't be learned in a college class. While education was once seen as the passport to financial stability, practical experience is now the preferred path to acquire the skills needed to derive both meaning and income from your work.

Final wrap-up

The central theme of this book:

The notion of landing a steady 9-to-5 job after college has been increasingly unrealistic since the dawn of the new millennium. Our society is undergoing a transformation towards an entrepreneurial economy, and it's crucial to capitalize on technological advancements to craft meaningful work that encourages risk-taking and creativity. This alternative offers more wealth and freedom compared to the outdated model of the 9-to-5 grind that has lost its allure.