Assess – Recommend – Improve – Educate

This post marks the return from a very long and unexpected hiatus from regularly posting my blogs. At first it was only supposed to be a small one of a couple months while I put all of my focus on creating a course on Udemy called The Gig Economy Preparation Guide which is essentially a “One Stop Gig Economy Information Central”. It’s primarily an analysis driven course of 4 hours yet I consider it to be a “Living Course” that will constantly be updated and expanded as I continue to explore this phenomenon. That being said, I already have plans for updates and a major new lesson on the AI impact. Shortly after the course was launched essentially my life informed me that it had other plans all of which were related to dealing with becoming The Reluctant Gigger which I will go into in future posts. I’m now permanently back with lots to say so let’s get on with it…

It’s not too much of a stretch for anyone who takes even a few moments to ponder the relationship between Corporate America and the Gig Economy that they are interdependent.  The purpose of this post is to bring forth elements of companies that feed into this expansion of the Contingent Worker and to some degree have caused the expansion of what has now come to be known as the Gig Economy including its many various nomenclatures.  It also shouldn’t be too much of a revelation that much of this revolves around its financial aspects.  Before I embark upon this little adventure I want to emphatically state that I am not in any way an economist or financial analyst.  Everything I will be discussing comes from over 18 years of experience as a Metrics & Reporting Analyst coupled with my innate analytical ability to take in large amounts of information, see their eventual patterns, and from that construct well thought out conclusions.

Over the course of my career, some of my reporting has gone from the “worker bee” to the C-Suite and all points in between.  Because of that level of visibility, some people in management would befriend me to get an “inside track” of their information.  From that relationship they sometimes would relate some of the “inner workings” of the company.  For example, one company was involved with a proposed merger that would give them a better predominance in a region they didn’t have.  The news was all a buzz about how this would be used to dominate that market driving prices higher.  Their response was that this was not the case and just business expansion.  Yet after the merger didn’t go through, I was secretly told that dominating the market and driving up prices was exactly their intention contrary to what was said in public.  A combination of these “Whispers at the Watercooler” in conjunction with various news items over the years has resulted in this perspective.

This will not be a one sided account on the “Evils of The Corporate” as I will be covering elements of the Good, the Bad, and the Ugly.  I will be using these as a foundation when exploring the recent merger of Amazon and Whole Foods where you’ll see they have participated in these elements to some degree.

The Entrepreneur Spirit

Many companies start out with what can be called the Entrepreneur Spirit.  One or more people have a vision that fulfills a need or even can see a need before anyone knows it and then embarks on the creation of this vision.  There are many examples of humble beginnings in a living room, garage, basement, or small store with little or no startup cash, long hours and loads of diligence.  This can also easily start out as freelancing.  Seth Godin says, “Freelancing is the single easiest way to start a new business.”  It is the Business Model that determines if the initial business is entrepreneurial or just an independent business.  The determining element of this Business Model is the concept of scalability.  The vision must be able to expand beyond the initial efforts of those that initiated their vision to the point that they eventually oversee it such as becoming the CEO.  This then brings in the element of “money while you sleep”.  Referencing Seth again, “Entrepreneurs make money when they sleep. Entrepreneurs focus on growth and on scaling the systems that they build. The more, the better.”  This then can go in one of two directions.  The Entrepreneur(s) either sell the business and move on or continue to have a hand in its ongoing development as it continues scaling.  Eventually outside money becomes involved in order to reach the higher altitudes of scalability.  “Entrepreneurs use money (preferably someone else’s money) to build a business bigger than themselves.” – Seth Godin.  Throughout several videos and articles Seth gives multiple examples of how businesses can appear to be entrepreneurial but are not because of this fundamental concept of scalability.  One reference to this is “infinite growth” which is an important reference to the next foundational element, Profits.  Without this, there is no business no matter how big, small, or scalable.

Infinite Growth = Infinite Profits

At some point during the development (scaling) of the business it will require additional funding outside of the initial investments and its ensuing profits else it cannot continue on its vision quest.  The additional funding could come from a business loan, private investors or even one or more Venture Capitalists (VC).  Some of the big Gig Economy businesses are financed with VC’s.  There’s sort of a one to one connection as in the bigger the vision the bigger the monies to the point that a business loan may not suffice leaving only private investors, VC’s or launching an Initial Public Offering (IPO) to become a Publicly Traded Company on the stock market in order to maintain the growth of the company’s vision.  This brings up a particular distinction of profitability between private/VC funded and stock funded businesses.  I’ll use Uber as an example because they’re in the news a lot.  Uber is VC funded with a valuation in the billions of dollars yet due to the private funding, they are not required to report their earnings and many times are referred to as barely making a profit if at all.  Publicly traded companies are legally required to report their earnings both actual and projected.  You’ll hear in the news how a report did or did not meet those projections and their stocks react accordingly.  Another thing that can affect stock prices is news either good or bad such as a merger of the company with another that will cause stock price increases or an announced merger of another company that may affect that company’s market share or getting accused of some kind of illegal activity which then create a selloff thus reducing the stock price.  Money makes the world go round.  Cash is King.  Profits Rule.  It doesn’t take a financial genius to realize that no company can survive without being consistently profitable.  The coupling of scalability aka infinite growth with company profits is where some issues originate because the bigger you get the more you earn the higher your valuation goes the higher your profits become resulting in a quest for infinite profits.  There appears to eventually come a point where this quest for company profits will begin to have effects either internally such as reductions in force, wages, or benefits or externally with various changes to the product.  There are some instances where I’ve seen both happening.

Job Creation

All of these elements results in the eventual hiring of employees to support the ever expanding business functionalities as the company continues to scale upwards.  This allows these employees to pay rent or mortgage along with various other household overhead expenses.  They can now purchase vehicles for various modes of transportation.  Take vacations traveling to various relaxing destinations.  Purchase extraneous Items of Pleasure.  If they have children these jobs allow them to financially support their children in various ways.  These monetary activities that come from the consistent paycheck allow them to acquire credit of various types so that they can purchase those larger items without having to come up with the money first.  This Entrepreneurial Spirit eventually evolved to become the basic foundation of the economy both locally and nationally.  Its persistence since its origin as a result of the Industrial Revolution evolved into the 8 hour workday/40 hour workweek with benefits launched the concept of the Permanent Job as many people worked at the same company for the entirety of their working lives.  Whether it’s the local “mom and pop” brick and mortar to the mega-corporations, they all contribute to many people for many generations being able to have at least a decent job making a decent wage in order to live a decent life where many stick with a job for the majority of their life under the guise of the Regular Paycheck.  They passed on these ideals to their children who then did the same in their own way.  It worked well for a long time but things began to change as technology became more involved with more and more of the world getting connected to each other.  As that began to occur the ideas of cheaper labor in other areas of the world began to have an impact on these ideals as more and more of “Free Trade” became the norm.

Now that I’ve covered the very high level good aspects of Corporate America, next up I’ll be exploring the Dark Side some of which may be eye opening if you’ve never explored these areas.

Stay tuned…

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