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The Gig Economy Preparation Guide

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In Corporate America and the Gig Economy (Part 1, Part 2 and Part 3) I outlined at a very high level the Good, the Bad, and the Ugly of Corporate America and how that is and will impact the Gig Economy.  I used the following categories to do discuss these corporate elements: The Entrepreneur Spirit, Infinite Growth = Infinite Profits, Job Creation, The Cold Sweeping Hand, Infinite Profits > Life, and The Race to the Bottom.  Amazon, Whole Foods and the Gig Economy (Part 1 and Part 2) covered The Entrepreneur Spirit.  Part 3 will delve into Jeff Bezos’ unique approach to Infinite Profits = Infinite Growth and the reason why that unique unending approach continues unabated.

Amazon: From Book Seller to The Everything Store (Part 3)

Infinite Growth did not always equal Infinite Profits

True to being a scalable endeavor, Jeff wanted Amazon to be more than just retail, he also wanted it to be an online community which led to allowing users to add their own book reviews for everyone to view which is a mainstay to this day albeit the constant barrage of fakes ones, yet if you take the time to discern you can manage your way around it which I do all the time.  He got affiliates into his game early on starting in 1996 with the Associates Program.  The Initial Public Offering (IPO) occurred on May 15, 1997 as AMZN “targeted at $18, but by the end of the day, public demand had pushed the share price to more than $24 per share.” (Techwalla)  In that same year they added movies and music.  The following year began their international quest with sites in the UK and Germany.  The year after, 1999, they “opened four order fulfillment centers in Fernley, Nevada; Coffeyville, Kansas; and Campbellsville and Lexington, Kentucky to handle the large mass of orders” which was followed by Jeff being features in Time Magazine as “Person of the Year in 1999, calling him “king of cybercommerce.” (Techwalla)  He also expanded his product line to now include Consumer Electronics, Toys & Games, Home Improvement, Software, Video Games, and Gift Ideas Stores.  The turn of the century continued his “relentless” expansion along with the now famous logo of the curve “smiling” arrow from A to Z.  Starting out with one category of books, they eventually expanded to 17 main categories and 143 sub-categories. (Techie Sense)  Check the Amazon Timeline Infographic in the Techie Sense link in the Resources Quoted and Referred section at the end of this post for more details of his year to year growth.

Yet unlike many other successful publicly traded corporations, this infinite growth didn’t translate to infinite profits or even just plain ol’ profits for some time and it was all part of his plan. “Amazon’s initial business plan was unusual; it did not expect to make a profit for four to five years. This “slow” growth caused stockholders to complain that the company was not reaching profitability fast enough to justify their investment or even survive in the long-term. When the dot-com bubble burst at the start of the 21st century and destroyed many e-companies in the process, Amazon survived and grew on past the tech crash to become a huge player in online sales. The company finally turned its first profit in the fourth quarter of 2001: $5 million (i.e., 1¢ per share), on revenues of more than $1 billion. This profit margin, though extremely modest, proved to skeptics that Bezos’ unconventional business model could succeed.” (Amazon.com: Get Big Fast by Robert Spector)  “In 1995, when Bezos started to raise money from outsiders…he projected that Amazon would, if things, turned reasonably well, have $74M of sales in 2000 and be modestly profitable. In 2000, Amazon turned in sales of $1.6B and had a loss of $1.4B.” (LinkedIn)

These quotes would make it appear that once Amazon starting turning a profit that it would follow that infinite profit growth model that the majority of publicly traded companies adhere to.  To some degree that has happened because as of September 21, 2017 the stock is trading at $964.65 making it a major player yet when reading over the analysis at that time at amigobulls.com one can easily see that this adage of not adhering to that is still in play.  Here’s some quotes; “Amazon’s revenue has constantly climbed higher as the company is putting all its efforts to expand its topline. This has led to the creation of massive infrastructure causing Amazon’s assets to increase to over $65 billion. Amazon’s stock analysis highlights the contradiction in the exponential growth of its topline and its non-existent bottom line. After over two decades of operations many investors had started questioning if the zero profit business model of the company will allow it to survive in this heavily contested arena in the future.”  (emphasis added)  The final sentence clearly indicates Continue reading

The Cold Sweeping Hand

My first exposure to the devastating affect that infinite profitability has on those that supply the labor for those profits aka the employees came during the three year financial restructuring at United Airlines which was my first corporate job.  There were pay cuts and employee benefit reductions that also resulted in paying more for your insurance.  The combination of the cuts resulted in an average of a 15% reduction in Net Pay.  Eventually the pension system was dissolved and replaced with the now standard 401K; which if you knew the history of it would realize what a joke it is as it was never designed for the purpose that its used for today.  Then there were reductions in the number of people to perform certain roles which then forced them all to re-interview for the same job they may have done for years.  I saw people with 10, 20, and 30 years of service to the company basically being told “Thank you for your service” which was absolutely devastating to these people who believed they had a “Permanent Job”.  These very same people had many times over the length of their careers taken one for “Team United Airlines” that had some level of financial impact on them all under the guise of permanence.  Some were forced into early retirement.  Others were simply pushed out as Corporate Politics played out using the phrase “moved on to other opportunities in the company”.  I heard a lot of inside information during this time which was jaw dropping for me being such a novice in the ways of Corporate Life.  Other than the politics, it was all primarily based on cold, hard calculations because plain and simply The Corporate will survive, even if it’s at the devastation of many of their devoted employees.  As a result of these observations I came up with this phrase, “The Cold Sweeping Hand of The Corporate” as I watched it sweep across divisions throughout the company with some never knowing it was coming much less what hit them when it happened.  When you’ve worked at a company for so long, starting over can have a devastating impact on your personal financials regardless of the severance pay that was given.  This was the worst I witnessed because it was the only company I’ve worked for that went through this deep of a financial restructuring.  Yet other restructurings had many similarities so I’ve been through this a number of times in various guises.

Infinite Profits > Life

Depending on to what degree you may have researched what I refer to as “Corporate Shenanigans”, what I’m about to say may come as a surprise if not shocking.  I’m an Info Junkie and Truth Seeker in conjunction with having a fascination about everything so I’m always seeking truth and understanding in its various guises.  It’s not that all corporations are involved with this but unfortunately more that you may realize because the face they put on to the public can sometimes be more marketing than reality.  This all derives from the previous section discussing the drive for infinite profits and how they can actually get to the level of what I refer to as “psychopathic”.  I first came across this perspective when stumbling upon a documentary many years ago called “The Yes Men”.  It was about these two guys who punk various elements of Corporate America exposing many of its ludicrous behaviors.  It wasn’t these actions that took me by surprise but an element in the opening sequence that was demonstrating why they did these things.  Someone is filming a middle aged man sitting on a chair in a suit whose tie had been slightly loosened.  It had the air of being some kind of seminar.  You hear the man behind the camera say something to the effect of Continue reading

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. Continue reading

Disclosure:We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.

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