Start Up Blog

Entreprenuerial double dipping

Posted in entrepreneurship by Steve Sammartino on March 31, 2012

An important fact that emplyees and entrepreneurs ought remember:

You can’t sell your job.

Yes, we can build personal brand equity, but the revenue and value we create belongs to the owner of the organization we work for.

This leads me to an important factor that we must remember when we set out out on our way into startup land. We get the uncommon opportunity to get twice the benefit of everything we create. Let me explain.

Whenever we make a sale – we get to keep the gross margin. Put it in our pockets as profit. If we do this often enough, and well enough we also usually have a residual amount that we can pay ourselves as a wage. (yes, it is the opposite of what most people think, profits come before wages when we are building a business.) But the real kicker is revenue we create becomes a sale-able asset. We can sell our invented revenue stream. What this means is that for every dollar we earn, that is a dollar that we can sell. It’s a kind of entrepreneurial double dipping. And this is exactly the same thing the company anyone works for is doing by employing people.

The reason we can sell this revenue, is that the average sale price of a company is its annual revenue figure. So $1 in in real terms equals $2 generated.

Startup Blog says – get out there and generate.

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The white collar underclass

Posted in entrepreneurship by Steve Sammartino on January 3, 2010

Before the Industrial Revolution the average number of hours worked in the western world was less than 6 hours per day. Some say we worked less than two and a half days a week.

I won’t quote what the average number of hours are today, but it’s more for everyone I know personally. I’m certain many people reading this would work in excess of 12 hours on certain days.

So what happened?

We got stooged. The  industrial revolution made it possible for a larger segment of the population to work year-round, since this labor was not tied to the season and artificial lighting made it possible to work longer each day. Peasants and farm laborers moved from rural areas to the factories and work times during a year has been significantly higher since then the important  innovation of piece labour. That is, the ability to earn income based on output. Think bolts in car doors.

Over time longer hours lead to greater amount of industrial accidents and workplace injuries. Unions formed and laws changed on the factory floor. But, the office was a different place altogether.

Office workers – salary based workers who where historically in management worked for salaries. A fixed wage for a fixed number of hours. My father constantly reminds me that in his day office workers only worked from 9am until 4.30pm. That tradesman and factory workers were the only people who did extra hours. And they did this to make up for the pay discrepancy which was favour of salary workers.

Clearly times have changed. If you are working in a large corporate, cubicle farm, in front of a screen or any place where you don’t get your hands dirty then chances are your are part of the ever growing white collar underclass. Here’s the some of stuff that defines members of the White Collar Underclass:

  1. A fixed salary with no overtime (factory workers, tradesman, retail staff all have overtime)
  2. Regularly working beyond the ‘official hours’ including weekends.
  3. It is expected that you arrive before and leave after your official hours.
  4. No representation in your industry to protect employment conditions.
  5. No tax benefits or uniform allowances, because your work clothing doesn’t have a logo on it. Even though it is in real terms a ‘uniform’ and costs you 10 times what hands on workers wear to work.
  6. Your annual performance review is based on the subjective assessments of your direct manager who may or may not like you.
  7. You work in a large building full of people who look and act like you do, and no one really knows what anyone else does.
  8. In an economic downturn, you panic, because you know what you do is essentially expendable.
  9. Large parts of your day are dealing with procedure, invented by other workers to justify their own existence.
  10. You look at a screen for large parts of your day, but have restrictions on what information you can bring onto the screen from the outside world.
  11. You feel as though your rarely use the skills acquired in the formal education you needed to get that job.
  12. You can work for days, weeks and months without any physical evidence of tangible outputs of what you have done. You don’t make or fix anything real.

If some of the above apply to you, chances are you are part of the white collar underclass. A group of people who have been victimized by efficiency. A group of people who don’t do anything real. Which is why there will be a significant value shift and higher pay going to people (like tradesman) who make stuff. Simple supply and demand. In the past 50 years companies have became so good at what they do, that very few people really do anything, including you. But you are giving so much of your time… you know it, and it eats at your soul.

Startup blog advice: Earn your living. Do something that adds value, not takes up space. Even if it must be done at nights and on weekends. Even if it provides no income. The human soul feeds on real activity, not simple economic existence. Feed your soul in 2010.

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No 1 reason being an employee sucks

Posted in entrepreneurship by Steve Sammartino on March 17, 2009

The number one reason being an employee sucks is this:

You can’t sell your job.

No matter how good you are at what you do,

-    you don’t own your output
–    you are building other peoples brands and empire
–    you are at the risk of hierarchy
–    you are not servant to customers, but wage earners
(the fundamental issue)

What this means is that as an employee you are not serving those who actually pay your wages – your consumers. Instead you become servant to people who are best at ‘internal politics’. So for you to succeed in this environment, you too must excel at internal politics. Which takes you always for important real world skills entrepreneurs develop. And then the final reality is that at some point in your ‘employee career’ someone will not like you, and dispose of you. At this point you instantly lose any good will or employee equity which was built. Even if you are a stock holder, you still have no decision making authority.

employee-silhouette

The point is, if you want to build assets, being an employee makes it difficult because you lack control. If you want control, then you must have the courage to build something independently, like entrepreneurs do.

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