As my kids are getting older – my eldest is now entering high school – I’m turning into one of those dads who tries to impart wordly advice on them. Most of the time they wonder what planet I’m from.
Often times, I find myself repeating advice my own parents gave to me. It’s an odd feeling because when I first heard those words from my parents, I’m pretty sure I wondered what planet they were from.
Recursion in the real world!
One piece of advice that I’m trying to instill in my kids, which is very different than what I was told by my parents, forms the title of this post.
Go to school, get an education, create a job!
The old school way of thinking had a similar phrase, but ended with “get a job” instead of “create a job”. That one word difference is incredibly significant.
Who’s your employer?
The employer-employee relationship has fundamentally changed over the last generation. My father-in-law worked for the same company for almost 25 years before retiring. I know a number of people who were in that same situation. There used to be an unwritten social contract between many companies and their employees.
If you did your job and did it well, you would be rewarded with regular promotions and pay increases by your employer. Internal politics aside, there were many examples of people who “worked their way” up the ranks to become CXO executives. The current President and CEO of Intel, Paul Otellini is an example of this.
And, for many employees who remained with a company for 20 or 25 years, there was the pension plan. While not a princely sum, the employer had a pension plan that paid out a good supplemental income for a number of years after you left the company.
That scenario is far less common these days. How many of you reading this expect to work for the same company for 20 or 25 years? How many of you reading this work in a company that actually has a pension plan?
The most recent economic slump has shown that even the (seemingly) mightiest companies are not immune to complete and massive restructuring. i.e. huge layoffs, pay and benefit cuts, plant closures, mergers, bankruptcy protection, and even complete collapse (a la Bear Stearns). And those most impacted are the individual workers who have little say or control over the machinations of the companies they work for.
Self-reliance is on the rise
While the employer-employee relationship has never been a level one, the disruption of tens of millions of people’s lives and incomes because of the mismanagement of a few has shown many people that one of the most important lessons for the next generation is financial and employment self-reliance. Ralph Waldo Emerson would be proud.
A recent report came out indicating that in the US alone, 6.5 million jobs have been lost in the current economic downturn. That is equal to all jobs created in the US in the last 10 years. As I overheard someone say — we’re employed like it’s 1999!
It’s about creating value
Now there are some clear macro-economic benefits in teaching kids to create jobs instead of getting jobs. If we tell people to get a job, we are teaching them to be consumers and to be dependent on others for their financial livelihood and security.
If we tell people to create a job, they are producers, and think and act very differently. In fact, the supply/demand curve for jobs and employment would shift dramatically if only an additional 5% of people implemented this advice.
And think about the impact that would have on the (un)employment rate! Even if someone only creates a single job for themselves, that has a positive ripple effect in the economy. They are creating value, and that is the key. And while everyone won’t create a job for themselves, those that do will likely (directly or indirectly) create jobs for others as well.
One of the big problems in the most recent economic cycle is that a lot of the “wealth” that people saw, was not from value creation IN the economy, but value extraction FROM the economy. A few got rich by making a lot of other people poor. There was little actual value creation. Someone gained because someone else lost. At best it became a zero sum game in many parts of the economy. And we won’t get to the impact of criminals like Bernie Madoff.
There’s a great piece on Paul Graham’s site entitled “How to Make Wealth“. While a lot of it is focused on programmers and the value they can create, Paul makes the following statement midway in the article:
Someone graduating from college thinks, and is told, that he needs to get a job, as if the important thing were becoming a member of an institution. A more direct way to put it would be: you need to start doing something people want. You don’t need to join a company to do that. All a company is is a group of people working together to do something people want. It’s doing something people want that matters, not joining the group.
So there you have it. Paul Graham totally agrees with me! 🙂
The times, they are a changin’
We are entering a time where communication channels are almost frictionless. People in distant places can easily coordinate, collaborate and create products or services of real value. Someone in Eastern Russia can set up a service business and have customers in Europe, North America and Asia and never meet or directly speak with those customers.
Technological barriers are dropping. Capital requirements for many businesses are dropping. Supply chains are opening up. Today a 12 year old boy can start an online business and raise millions in VC money.
I hate to sound “old”, but as my kids are growing up, I see a future of great opportunities, if they are equipped to seize them. And I’m going to do my best to help them think and understand the meaning of value creation, about being a producer instead of a consumer, and about creating something instead of simply getting it.
I don’t want to turn my kids into little product managers, but there are certainly a lot of things about Product Management that I know will help my kids as they go forward in their careers. And while this is certainly a personal point of view, I honestly believe that there is tremendous benefit for society if we truly take those words:
Go to school, get an education, create a job
and instill them along with the necessary knowledge and skills into our next generation.
I’d love to hear your thoughts.