The Smartest People in The World Don’t Work for You

Business as usual in a traditional firm sounds like so last century. You can crowdsource your branding, your engineering, your design and pretty much everything you need for your business like you can find a great home for your trip on AirBnb instead of that crappy hotel for the same price. A great presentation by Marcus Shingles of Deloitte Consulting at the Singularity University Exponential Leadership Conference inspired me this post.

The Economist Jan 2015 — slide by Marcus Shingles, Deloitte Consulting

The Millenials want flexible work hours, they expect to be mobile and work from home/office/cafes at will, from anywhere really. They often work outside of normal business hours and prefer to freelance, work on flexible hours and collaborate online.

3 billion new minds are coming online within the next 10 years, many will learn and work exclusively online and never be a full-time employee of a corporation.

Isn’t the classic equity/stock options ownership outdated?

When I started working 20 years ago the startup employee ownership model was new. Most people just worked for a large corporation for a salary and bonus, unions were fighting the capitalistic model of the management making the decisions for the owners and the non owner “submissive” employees followed. Unions were much stronger and strikes and people in the streets very common (in Europe at least).

The startup model is now widespread, if you try to start a business in Silicon Valley and many other regions don’t even think about hiring anyone without hard equity or at least substantial stock options. Everyone who works for you has to own something of the business. Even the Facebook Graffiti guy could be worth $500m (a billion today?). Great.

How does this look like in the next 20 years as more and more people want to be working freelance when and where they want? Is the classic startup ownership model the right approach?

You have a business idea. You need co-founders who bring what you can’t do (in my case so many things but especially technology, I can’t code). You share the initial equity with them then share with everyone you hire with stock options, hoping they will stick around long enough so they’re worth the equity you gave them. Their bet is opposite, they hope the tiny ownership of the company they have will pay for their years working for you and the business will turn into the next Facebook and go public.

Even though it’s the norm in Silicon Valley, this vision of “employee ownership” seems totally outdated to me today. There will be less and less “full-time employees”.

Everybody should be compensated now and somehow in the future based on their real contribution, not really on the time they spent in the company as full time employees (vesting stock options).

A new model should emerge that can help freelancers coming in and out of the projects and the corporation as needed and getting compensated in a flexible way. Open source models are inspiring, they compensate the best contributors with visibility, recognition and ego-boost.

Does this make any sense or will we keep the same equity/stock options structure? What do you think are those new models going to look like replacing the traditional equity sharing? Anything comes to your mind as the beginning of new ways of collaborating and creating large projects?

Published in #SWLH (Startups, Wanderlust, and Life Hacking)

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