The Great Talent Heist
We’ve entered the lawless phase of the California Gold Rush.
With no sheriff in town, bandits are running the show. Huge numbers of talented young workers are being recruited into the desperado economy, and only a few ever manage to escape.
This time around, the gold rush isn’t localised in the American wild west; digital business is a global affair, with prospectors, outlaws and ranchers working remotely and often drifting from town to town. Homesteaders who decide to put down roots are faced with an uphill battle to get their taxes, visas and health insurance in order — which is where Iglu comes in — but most digital nomads pack their bags and go home before they get this far.
Make no mistake, this lawless world is the result of four technological developments:
- Silicon chips are so dense, you can carry a powerful computer in your pocket
- High-speed connections are so ubiquitous, complicated services can be delivered ‘from the cloud’
- Online experiences are so desirable, users don’t hesitate to give up their privacy
- Analytics are so sophisticated, data can be turned into gold
All around the world, founders are building online “businesses” that would never have been possible before all this.
Why did I put “businesses” in scare quotes?
Because most of them are not really businesses.
Thousands of entrepreneurs are doing incredible things with data. People are building services and organisations that improve lives and shatter our expectations about what technology can do — but these innovators are vastly outnumbered by speculators with a keen eye for opportunities to make a quick buck.
“Don’t mine for gold. Sell pickaxes” — Unknown
The archetypal gold rush scheme of 2017 was the Dropshipping Store. Thousands of ambitious youngsters launched e-commerce websites, selling a smorgasbord of mostly Chinese-made products behind glossy branding. Unscrupulous companies took advantage of the situation by running a wave of campaigns, fuelled by time-honoured pyramid scheme tactics:
‘Run your own business!’ / ‘Be an entrepreneur!’
A lot of would-be online retail barons had no one tell them “you’re not the entrepreneur, you’re the customer” until it was too late. Apps and services that powered these stores made a fortune, alongside anyone with the nerve to sell marketing courses, digital nomad package holidays and other accoutrements to these unsuspecting go-getters.
Wikipedia: Gold worth tens of billions of today’s dollars was recovered, which led to great wealth for a few. However, many returned home with little more than they had started with.
We can only guess at how the boost in demand for low quality, high-volume shipments of goods from Asian manufacturing hubs might have affected working conditions and greenhouse gas emissions. Another consideration is the clear breakdown in trust between online merchants and consumers. Ethical goods are increasingly desirable, and plenty of sellers find it much easier to bluff than to develop conscientious supply chains.
Wikipedia: The human and environmental costs of the Gold Rush were substantial.
It’s quite possible that the dropshipping phenomenon will taper off naturally by the end of the decade, but the stage is already set.
It’s now abundantly clear that there is a generation of gullible talent with an uncertain economic future, desperate for a taste of success, security and independence. This group stands out in the professional arena like a gazelle in the woods, and the wolves are circling.
The insistence that customers are in fact entrepreneurs is as brutally effective as is its reverse — the adamant labelling of employees as mere users, as favoured by ridesharing and delivery service apps. Most impressively of all, online freelancing agencies have found a way to fuse these two approaches — campaigns glorifying the toil and pain of the tireless knowledge worker are rampant, attracting admiration and scorn in equal measure.
Wikipedia: By 1855, the economic climate had changed dramatically. Gold could be retrieved profitably from the goldfields only by medium to large groups of workers, either in partnerships or as employees
The most fashionable piece of business advice at the entry level is, of course: ‘hard work pays off.’ Aspiring entrepreneurs are told they must see every setback as a stepping stone on the way to eventual success. At later stages, the story shifts dramatically; ‘outsource as much as possible,’ mentors say; ‘build quickly and cheaply — fix problems later,’ and finally — ‘systemise everything and turn your business into a passive income.’
The subtext is that employees, contractors and collaborators are essentially throwaway.
Creative and strategic expertise is not relationship-based — rather, it’s a product. The glaring problem with this creed is that if freelancers are given no opportunity to understand business goals and values, they will be unable to deliver their best work. This is especially frustrating for designers, whose insights can radically improve the quality of a product or service — but every discipline (and every individual) has wisdom and cultural value to offer that goes beyond the ability to deliver a package of work. Founders who fail to understand this miss out on the opportunity to build resilience and dynamism into their organisations, instead building fragile systems that orbit around their own personal brand and skills.
Wikipedia: Samuel Brannan [was] the first to publicize the California Gold Rush and was its first millionaire. He used the profits from his stores to buy large tracts of real estate… He died poor and in relative obscurity
Plenty of scaleups are already challenging the norm, and investors who have experienced the best and worst of business have written extensively that culture must be right from day one. However, many directors that take this kind of advice seriously still make a rigid distinction between employee and contractor. When it comes to technical disciplines, the consequences for alienating top talent are obvious; engineers and developers are in such demand that they can easily afford to turn down unrewarding work. Strategists and creative professionals, on the other hand, must contend with a much more skeptical environment. The importance of their contribution isn’t easy to recognise in the context of ‘execute quickly, fail fast, trim the fat’ management thinking. As a result, many brilliant thinkers suffer from imposter syndrome and struggle to make themselves heard in a highly technical and fast-paced business environment.
Despite this, the myth that being a self-starter means accepting terrible working conditions is starting to crumble, opening up a whole range of lifestyles for independent workers to choose from. Many young creatives and strategists are moving to countries like Thailand; the lower cost of living makes it possible to work part time and still live well while studying, acquiring skills or saving for the future. The critical milestone for freelancers is attaining a reliable income, which can be a huge challenge when so many companies demand creative work for free. Professionals must acquire business development and relationship building skills to transform this dynamic, and even then many independent workers find it tricky making sure that clients pay. This is where Iglu can help: managing tax, health insurance and invoicing for digital expats in Thailand and providing a hub for professionals to collaborate and learn.
