Understanding Necessity-driven Entrepreneurship in the Digital Age
Deborah is a 36-year old mother of two who manages her own home cleaning business through Facebook in addition to driving for Uber. She lives in a low-income neighborhood and is acutely aware of the challenges with finding and keeping stable employment. In order to take control over her source of income, she decided to start her own small business where she has the ability to choose her work schedule and how she manages customer relationships. Most importantly, she explains, this business could eventually become a potential career pathway for her children.
From one perspective, Deborah is successfully using an array of social technologies to create her own economic safety net. Platforms like Uber and Airbnb laud stories like Deborah’s to show how their tools are democratizing avenues to micro-entrepreneurship by supporting small business owners around the world.
However, these optimistic tales mask a more complicated story. Social technologies, such as sharing economy platforms and social media sites, are playing a critical role in how people create their own employment opportunities. More and more research shows how these technologies are building a precarious labor population with fewer rights and benefits. People who face challenges finding employment enter the digitally-mediated economy because of lower barriers to on-demand income. Yet, once they enter this system, they find it difficult to transition to more stable jobs where they can advance their careers. For instance, we found that many micro-entrepreneurs, like Deborah, ultimately stopped using sharing economy platforms to find work because they had little control over their clientele and opportunities for skill development.
We set out understand how these tech-enabled pathways to entrepreneurship could better align with worker values around professional agency. Through a study involving interviews and observations of micro-entrepreneurs in Detroit, we found that the constraints of performing entrepreneurship in resource-constrained communities changes how people use social technologies to build their businesses.
To support professional agency through micro-entrepreneurship, social technologies must go beyond providing on-demand income or simply matching service providers with consumers. Platforms also need to provide the following support:
1) Scaffold increasing levels of independence
2) Facilitate local engagement for skill sharing and social support
3) Enable flexible options for achieving privacy and safety
Increasing Independence. Participants said that sharing economy platforms limited how they could grow their own business networks. On sharing economy platforms, interactions with consumers end when a particular job is done. These platforms don’t want providers and customers to develop their own side relationships, potentially because it could cut future profits. In effect, there are limited avenues for aspiring entrepreneurs to build an entity that they could take ownership of or “pass down” to others.
Local engagement. Participants valued collectivist means of building enterprises, whether that meant sharing best practices with peers or engaging locals in business development. They described decisions to hire locally or adjust prices to prioritize neighborhood wellbeing over personal profits. These examples uncover nuanced cultural factors behind business decisions that are often difficult to program into online algorithms.
Privacy and Safety. Some participants described avoiding sharing economy platforms, like driving for Uber and Lyft, due to safety concerns. Rather than having to service whichever customer the app assigned, participants preferred pre-screening people through multiple levels when it came to their own business. This often involved a process of online messaging, texting, and phone calling before agreeing to meet with customers in person.
How can social technologies be designed to better support professional agency among micro-entrepreneurs? By creating social technologies that reflect community member values beyond just providing on-demand income, we can create an ecosystem that empowers entrepreneurial growth and career advancement. To find out more, check out our paper, Making a Living My Way: Necessity-Driven Entrepreneurship in Resource Constrained Communities.
We thank our interview participants for sharing their stories and experiences with us.
This work will be presented at the ACM Conference on Computer Supported Cooperative Work and Social Computing 2018 on November 7, 2018 in Jersey City.
Full citation: Julie Hui, Kentaro Toyama, Joyojeet Pal, and Tawanna Dillahunt. 2018. Making a Living My Way: Necessity- driven Entrepreneurship in Resource-Constrained Communities. Proc. ACM Hum.-Comput. Interact. 2, CSCW, Article 71 (November 2018), 24 pages. https://doi.org/10.1145/3274340