Do you think about becoming self-employed? Do the thoughts in your head go something like this, “I hate working because….”
You know those reasons:
“I detest office politics.”
“I don’t get enough money to do this,”
“No one recognizes how special I am.”
“I can’t stand my lazy co-workers one more minute.”
“This is the fifth time I’ve been laid off. I don’t want to go out and job hunt again!”
Have you ever thought, “I should become self-employed!” Is that how self-employment happened, or might happen, to you?
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Once upon a time, a professor with a degree from the prestigious London School of Economics offered myself and another librarian extra employment to put together a resource list for his students.
We were thrilled. Then the professor let slip to me that he was also hiring an English professor to edit his workbook. My reaction, as someone who had all but three courses needed for a PhD in English, was to think (a) you didn’t need a PhD to edit, and (b) many English professors had no idea how to edit writing.
Then the economist dropped the real bomb. He told me that he had to pay his English professor buddy twice a much as the other librarian and me.
When I asked why, the economist said, “Because he can get a lot of work editing. But you girls’ opportunity costs for outside work are far less than his.”
I was stunned. I knew what an “opportunity cost” was. It’s the cost of foregoing the “road not taken.” I was outraged at this excuse for paying two women less than a man. When I explained what happened to her, so was the other librarian.
Here’s the thing about economists. Economists tend to draw a rigid line between “work” and leisure.” They learn that wages are payment for “giving up leisure.” To economists, leisure is mainly of interest when studying consumer-buying preferences. That’s not a glamorous part of their field.
So it’s understandable that the economics professor forgot there’s always an alternative to work. That alternative is leisure. One can just say “no” to a low-ball offer of a job.
And that’s exactly what the other librarian and I did. The “smart” professor wound up compiling his resource list in what would otherwise have been his own leisure time, but for no pay.
So, does the economists’ definition of wages as a reward for giving up leisure time mean anything for self-employed people? I think not.
Self-employed people are self-directed. We have the opportunity to mix and match personal and work life at will. For many of us, it can be hard to draw a hard and fast line between work and leisure the way a factory shift or a 9 to 5 schedule at the office does for those who work for a single check from an employer.
And self-employed people do much that is not directly compensated by our clients. To survive, a good chunk of our time has to be spent on thinking about our work and designing better and more efficient ways to do it. No one pays us while we improve our skills. No on pays our benefits like health insurance, and retirement. We have to take care of those kinds of things ourselves.
So, for self-employed people, opportunity cost often boils down to choosing to do one thing over another, period. Something that may seem like leisure or fun may well turn out to be invaluable to our business. And something that may feel like work may be an utter waste of time.
As self-employed people we have to:
Not accept the things we’re used to,
Have the courage to try something new,
And find the wisdom to know when to do what.
Each of our decisions about what we’ll do and what we won’t determines how much we profit from our businesses.
The money we get is not a wage. It is not payment for giving up leisure. It is not even for the work we do. It’s for our talent, expertise, and experience. Leisure isn’t something we give up. It’s something we gain from putting our talents to better use.
Copyright © 2009 Nancy K. Humphreys
A teenage Morgan Stanley intern is ringing bells on London’s version of Wall Street. The teen, Matthew Robson wrote a market study about what his peers like. The word “free” was a prominent note in his piece.
Teens don’t like regular TV or advertising. Nor do they prefer print. They don’t favor Twitter. Forget radio! Forget phones! No!
Their time and money is spent on cinema, concerts, and video game consoles. The latter are used in lieu of computers or phones for texting friends.
“Wait a minute, Nancy. Where do you get the word “free” in all this?”
If you read David Mathison’s new book, Be the Media you’ll see. The theme of David’s book is the battle between traditional media forces and the new Internet media way of doing things. The latter is what Matthew Robson was telling the financial moguls in London about.
In traditional media, the idea is to “hook” consumers with “free” or low-cost “come-ons” to become subscribers. You subscribe because there seems to be little alternative among the big corporations offering you media services. Then you watch in horror as your bill goes up and up and up each month.
Burned by offline giants like Comcast, AT&T and Verizon, you tread carefully on online giants such as Google, MSN, Facebook and other “free” sites, perhaps recalling the furor on MySpace after Rupert Murdoch, owner of Fox News and other mainstream media bought it and began changing its TOS (terms of service).
When it comes to traditional and online mogul media, “free” comes with strings attached. You are going to have to pay in one way or another: more money for less services as your subscription costs rise; less privacy; charges for things you used to get for free; or having your time wasted by advertising, some of which (my last paid email provider as one example) is downright disgusting and/or nauseating
In the new media model, also called the “10,000 fans” or “the long tail,” free stuff, such as music downloads, is given away in order to promote personal services, like concerts or music instruction or other experiences, for which you do pay. The deal is out in the open. You sign on as a fan instead of a subscriber. When you do sign on, you get more when you pay more, not less.
The new media model is described in detail in Mathison’s book, Be The Media, along with all of the new media tools, Internet sites, service providers and community organizations that support it. This is why I have an affiliate link to it. I feel everyone, and especially authors, musicians filmmakers, graphic artists, digital tv and radio shows, and independent news writers, needs to know what’s in this book.
In my view, what Matthew Robson’s peers are doing is going for the free-est versions of media they can find. They like commercial-free radio, films and concerts (where the performers they like do earn a living by charging for tickets or selling branded merchandise), and video consoles where they can chat—on devices their parents no doubt supply them for their birthdays and pay the Internet charges for.
The downside of this is the fact that most teens aren’t going to have a lot of disposable income in the current economic climate. The upside is that they’re managing the money they do have exceedingly well. For “creatives” and small businesspersons who are in the creative and digital production and distribution service fields, this new business model is a boon to earning a living.
But have no fear about this being an easy road.
First, there are the traditional media who are trying desperately to hang onto their best-seller profits through use of what Robert Kiyosaki, author of the Rich Dad, Poor Dad series, calls “business systems.” These systems are government and legally-enforced monopoly rights to ownership through contractual vehicles such as copyrights, royalties, patents, and franchises.
Be The Media is filled with horror stories of how these “rights” have often been used to leave creatives with next-to-nothing while ever-consolidating giant producers and publishers walk off with trillions. These companies will not give up without a fight.
Second, with the collapse of traditional speculative markets, there are risk-loving investors entering the “intellectual property” field. Under the new investment fad of “securitization,” the big money-players are looking to buy up song rights and branded merchandise and other “intellectual property” from mainstream artists and others from whom they plan to profit.
Securitization of intellectual property is different than the act of flipping intellectual property. “Flipping” traditionally involves a house that is bought at a low price, fixed up and sold at a higher price. But on the Web it means a blog or social network is bought, improved in content, function, and appearance, and then sold for more money.
In this case there is a measurable improvement in the media property being bought and sold. That’s the number of subscribers. Not so in bankers’ and brokers’ securitization markets. Those are the markets that brought us the asset bubbles (e.g., the largely now-defunct SIVs or “structured investment vehicles”) popped by the last economic downturn.
Securitization of intellectual property is a big-money gambling game where there are expectations of huge rewards from “arbitrage,” or price differences, based on everyone’s lack of information about some unknown kind of inherent value underlying the royalty cash flows from media property. In other words, no work is involved: there’s just a “hunch” that prices will go up. Sound familiar?
Personally I think we ought to listen to Matthew Robson and David Mathison’s Be The Media. It looks to me like today’s teens aren’t about to support giant media or big money arbitragers’ hopes for the future.
Copyright © 2009 Nancy K. Humphreys