Friday, May 18, 2012

New Millennial Economics, Part Four

Chris Guillebeau, The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future

Once upon a time, every business was a small business. Of course, nobody called them “small” businesses, because multinational corporations and faceless banks didn’t exist yet. Adam Smith, the theorist of capitalism, assumed that his model applied to small operators like “the butcher, the baker, and the brewer.” And a new generation of business guides has appeared lately for independent-minded workers who would reclaim that model.

I see two business types spotlighted in Chris Guillebeau’s latest guide to seat-of-your-pants entrepreneurship. The larger type consists of businesses like the London waitress who started a one-woman PR firm, and discovered she was so good at it that it went multinational; or the arts festival organizer who proved so good at creating buzz that it became a sensation. These are truly small businesses, one or two people, who got rich by doing a good job.

The smaller type consists of businesses like the one-man mattress emporium with which he starts the book, or the book publishers he cites occasionally. These businesses appear small, but rely on complex networks to make their business models even possible. The mattress mogul created his retail outlet from spit and staples and string, but workers on an hourly wage make his product. Publishers require contractors to print the book or, for e-publishers, server slaves to distribute the product online.

This gulf lurks under much of Guillebeau’s book. I find his larger business model admirable. Guillebeau shows how these pioneers made a marketable product out of their own knowledge, effort, and connections. My favorite is the Omaha woman who sells custom wedding dresses worldwide: I just really, really like her. But Guillebeau doesn’t examine the assumptions under his other model, which turns a profit by outsourcing the more tedious operational procedures.

Where Guillebeau deals with small businesses which are actually small, he makes a persuasive case. Many people invest years of study and go tens of thousands in debt to get MBA’s, only to become cogs in somebody else’s machine. Yet most of us have the know-how to, as he puts it, fire our bosses. The difference between those who do so, and those who make someone else rich, often boils down to having a practical vision and a useful plan.

Yet Guillebeau demonstrates the trap our current economic system sets for would-be entrepreneurs. The sight of high-rise multinational interests creates the idea that such a model is normal. If the company that sold us our business computer can ship expensive, time-consuming, banal tasks like Customer Service to India, I can contract my manufacturing to some outside entity with a clear conscience.

I ask you: if you do that, are you still a “small” business? Just because you don’t have dozens, or hundreds, of workers on your payroll, doesn’t mean you haven’t bought into the two-tiered system that led to such outrage in Zucotti Park last year. I suggest that, in such a case, you aren’t even your own boss. If your contract manufacturer, ISP, or other external business arm wants to change the terms of your arrangement, they can literally hold you hostage.

Please don’t mistake me. I like much of Guillebeau’s work, and find his business model inspiring. Too many of us remain in unfulfilling jobs that suck our souls out through our toes, because we think we have no choice. (Not me, of course. But possibly you.) For readers who can distinguish true productivity from externalized tedium, Guillebeau makes us believe we can seize our destiny back from our corporate overlords.

Guillebeau also does a good job explaining the how-to of making a market for the product you’ve created. I enjoyed his chapters on leveraging early success into continued growth, and on how to take your microbusiness into the big boys’ world, if that’s what you want. And he does a good job of showing how to turn a business failure into a learning experience (though again, that only works when you are your own best product, instead of shucking somebody else’s output).

I just fear that, despite the good points Guillebeau makes, he overlooks too many assumptions of what being “small” means. If it means you make something, whether a product or service, which you then sell to others who can benefit from your expertise, then I like it, and want to follow on his trail. If it means externalizing tedium, and getting rich off the more glamorous parts, that’s as bad as the bosses we all want to quit, and I want no part of it.

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