This post is two-for and it’s all about the future of jobs. Taylor Pearson joined James Altucher to talk about his book, The End of Jobs and Adam Davidson joined Russ Roberts to talk about the “Hollywood Model.” All four thinkers believe that the employment landscape is changing and they – and others we’ll dive into – all have a common thesis for what it will look like in the years to come.
Pearson told James that it all started for him when he looked around and thought, “wow.” He was sitting at breakfast with a group of entrepreneurs and asked, “why was this situation possible?”
That situation that Pearson talked about was a group of expats sitting in the Philippines. All there because they were able to meet and talk about the work they were doing. Thanks to a world-is-flat style changes they were able to run their business from anywhere.
Across the pacific ocean in California things looked similar. “Here are hundreds of people,” said Adam Davidson, “that snap into action on day one but when the lights go down they are scattered to the winds.”
Both the ex-pats at breakfast and set designers in Hollywood told the same story of the new employment model. Both groups had a suddenness of arrival, a completeness of their action, and a firm dispersal. It’s like a flash-mob for business.
If we are going to look at how the employment landscape has and will continue to change, we need to dive in, dig around, and come out with some conclusions. Pearson, Davidson, Altucher, Roberts, and others have given us these questions to answer:
- What biases do we have that prevents us from seeing these changes? (The Legacy Effect)
- Why don’t we accept these changes? (The Fear)
- How do we find answers in this changing landscape? (The Cynefin Framework)
- How do I continue to learn? (Post Graduate Education)
- How to I start? (Start Small)
- Why shouldn’t I grow? (Stay Small)
- What happens when everyone can Google you? (Keep Your Name and Nose Clean)
These questions won’t have clear answers, and for good reason. Once there are clean answers, things have already begun to change again. This post is about where things are going, not how they are.
As Peter Thiel (episode #43) likes to ask, “what is an important truth that very few people agree with you on?” This may be one.
The Legacy Effect – Overcoming our biases
If you put a frog in a pot of boiling water, the frog will quickly jump out because it notices the water is too hot.
If you put a frog in a pot of water and then slowly warm it, the frog will slowly boil to death because it doesn’t notice the change in temperature.
These changes are happening but hard to see because we have a legacy tendency in our thought. “It takes time for anyone’s mental model to adapt,” Pearson tells James and if we adapt too slowly, we become like the frog in water. Most of us think, “I’m getting a paycheck, I must be doing something valuable,” but don’t fall into that mindset says Pearson.
Most of us can’t identify the gap between what we do and the value it provides. But not all of us. There’s a group of people who see the gap in real terms, Hollywood.
Or that’s the case that Davidson makes. In what he calls, “the Hollywood Model,” Davidson says there aren’t the same illusions of value because of the way work works. You might work for two or three months on a project but then it’s time to find another job.
In addition to finding jobs, filmmakers have to negotiate their wages. How much can you charge? Will it be enough? The search for work, combined with how much you earn is a regular feedback systems that many people don’t have.
A specific example, Davidson reports, is the value of artists who can do zombie makeup. Ten years ago makeup artists didn’t need to know how to do that, but now they do. That’s a signal.
Add in our squishy feelings and we have a real mess. “There is some romance about long term employment in the United States,” says Roberts. We like the feelings of security, even though that job may not be all that secure.
The Fear – Why we don’t accept the changing landscape
It’s hard to move out of this steady situation. We are afraid. But Nassim Taleb gives us a parable to think about it in a new way. Imagine there are two brothers. One is a banker, the other a cab driver.
The banker’s incomes is steady month after month. The cab driver makes the same amount each year, but his income varies monthly. Which of these two careers is the safer career? (In Taleb’s terms, which is more antifragile)
It seems odd to say, but he cab driver is the safer career and part of the reason is that the cab driver gets signals about his work. If he’s at the airport at 6AM and there are no customers he will see that right away.
The banking brother doesn’t get these same signals. He has to read the tea leaves of market changes, investment rates, and so on. The 2008 crash and devaluation gives some evidence to how much real value the financial sector added.
We can morph our fear with a change in wording. Seth Godin (episode #27) writes that we can shift our thinking between risk and uncertainty. Godin suggests we recognize that we should seek outcomes that are uncertain rather than risky.
“But a range of results, all uncertain, does not mean you are exposing yourself to risk. It merely means you’re exposing yourself to an outcome you didn’t have a chance to fall in love with in advance.”
This happened to Chris Hadfield (episode #111). Before he was scheduled to lead a crew to the International Space Station, Hadfield had to go for an emergency ultrasound on an old surgery. It may not have healed correctly and if there was any chance of danger, Hadfield would be scrubbed from the mission.
This wasn’t a risk, just an uncertainty for Hadfield. While he had worked his entire life to lead this mission – and it would be his last chance to do so – it was just a moment of uncertainty. On the car ride to the ultrasound appointment he talked with his wife about what they would do if he was scrubbed from the mission. By the time they arrived at the office they had a plan.
Tim Ferriss (episode #109) calls it a nebulous fear of failure. We don’t know what kind of monster is hiding for us in the closet, but we’re sure one is there. If you open the door and dig around, you’ll see there is no monster. That thing you were afraid of just the work you need to do.
The Cynefin Framework (Wha?) – Where to find answers
Pronounced “ku-nev-in,” this is the idea that there are different decision making contexts and each one requires different thinking.
You wouldn’t celebrate your anniversary at a fast food restaurant. But if your wife is pregnant and she wants McDonald’s french fries that’s the only place you should go. Everything is contextual and the Cynefin Framework is a way to contextualize decisions. There are five areas situations can fall.
- Simple contexts. These are situations with one answer and many people can find the answers.
- Complicated contexts. Situations that may contain multiple answers and they may not be seen or understood by everyone. Who you marry might fit here.
- Complex contexts. Situations of flux where we only have a retrospective understanding. Complexity theory lives here (if butterfly flaps it’s wings in Oklahoma, it could cause a storm in Connecticut).
- Chaotic contexts. Cause and effect are impossible to determine.
- Disorder. You have no idea what context you are in.
Pearson brings this up in his interview and I think his point is this – we view our career conditions as simple contexts but we should look at them as complicated or complex. The logic for simple contexts goes: if they pay me, then my job must be valuable. But we’ve made the case that hidden in there are changes we aren’t attuned to.
Instead we should look at the complicated and complex models to see how our career conditions fit there. One positive variable in those instances is continued education.
Post-graduate education – How we can learn
Pearson may be more critical of school that James (which isn’t easy to do). Pearson’s angle is that school evolved as a method of compliance. A way to prepare people to work in factories. That has clearly changed, but Pearson says education on the whole has not.
“You need need to be thinking not about what’s been true for the last fifty years, but what will be true for the next fifty,” says Pearson.
For Pearson it meant getting an apprenticeship, something that Robert Greene (episode #1) told James as well. Pearson also echoed what Ryan Holiday (episode #108) and James have said about free offers. Don’t offer to “work for free” so you can do “whatever it takes.”
Instead, approach a person and present them with something they can just say “yes” to. Holiday says that the free offer isn’t free for him. It may not cost him money, but it costs him something even more valuable, his time.
Pearson’s education consisted of learning about WordPress, and then SEO. After that he learned Google Adsense and started making some money, but not much. “I was making $5 an hour doing that work,” he tells James. “Bravo,” I imagine Robert Greene might say. Greene stresses that early on you want to build your career capital not your bank account.
Beyond learning specific skills, Pearson also picked up bigger ideas. He tells James that Rob Walling’s Stair Step Method is a great model.
The apprenticeship is alive and well in Hollywood says Davidson. This is what Sam Shank (episode #78) saw as well when he was there, and it’s why he left. Shank didn’t want to be an apprentice for decades. He wanted to create something right away.
But however you do it, start small.
It’s repeated over and over, and it needs to be. According to Stephen Dubner (episode #20), there are four good reasons for starting small:
- Small questions are less often asked and may be virgin territory for discovery.
- Big problems are dense and intertwined small problems that have to be solved first.
- Small problems have a smaller mass and are easier to change.
- Thinking big leads to more speculation, small problems can have more accurate observation.
Pearson tells the story of someone who bought an invoice business and grew it to be more profitable. Matt Barrie (episode #114) told James nearly the thing. He needed freelancers and was using website that connected him. Eventually he bought that company. Then he bought another. Now he runs the biggest freelancing site on the web.
Steven Kotler (episode #118) introduced the idea of “first principles” from Elon Musk.
Another case for a small start is the nuanced knowledged required. When Davidson was on a movie set he noticed that one person was in charge of the scene’s wall if they were interacted with (written on for example) while another person was in charge of them it they weren’t. Those people told him they had to choose the perfect “white” to set the scene. The perfect white? Does it matter?
According to Davidson it does. Each person there he says, was very good and their cumulative decisions together made everything fit together like a puzzle.
In the new landscape of jobs you may be the small fish that’s really good at one thing. That’s fine.
Another trend that Pearson has noticed is to stay small but serve more people. This sort of boutique service is also what Davidson saw in the Hollywood Model. It’s owning a skill rather than a job and shopping that out to more than one person in a year. In Hollywood, Davidson says, a camera operator may work on six films in a year. Davidson continued:
“I don’t know how to see the future without seeing a lot more of that. People finding intimate, passionate engagement with their customers.”
How might this relate to the new economy?
- Chefs could cook for 12 families rather than 1 restaurant.
- Teachers could quit teaching in favor of tutoring a handful of students.
- Writers could write for many different publications.
Another analogy is what Nassim Taleb calls barbell/bimodal thinking. You have Google/Amazon/Apple that sell the same services/thing to many people. On the other end you have artisans/custom woodwork/writers who do more variety but for less people. Rather than aim to become someone who does the same thing many times over, think about moving to a job on the other end.
For example, what would you tell your friend Factory Joe about the future of his job? The workforce in the plant he’s at has shrunk 80% from its peak thirty years ago. Factory Joe’s older brother started out at $25/hour, but Joe began at $18/hour. There’s no guaranteed pension (if there ever was) and there is a small 401K match. Joe sees the outsourcing news on television but also sees reports like this and this about companies bringing some factory work back to the United States. What advice would you give Joe? What advice would an economist give?
Tyler Cowen wrote a book with some of the – possible – answers.
I imagine that Tyler Cowen would sit down in his office with Factory Joe and lay out a two-fold case.
- Educate yourself. Yes, some factory jobs are coming back to the United States, but not as many as left. Combined with that is that the jobs that are returning are highly skilled. You can’t take a Honda line machinist and maker her an Apple computer assembler.
But, the good news is that you can learn how to do new things quite easily. Factory Joe could begin taking free class in robotics from MIT or something else from the buffet of options. Joe’s father was limited to learn at work, and earn promotions there. Joe’s experience will be to learn outside of work, and receive his promotions there.
- Get another job, then another. Factory Joe probably has a lot of skills. He’s good working with his hands, can take things apart and put them back together, and knows about electronics and engineering. Joe could build up a set of clients to serve and do repairs for them.
If the upper class is going to grow (as Cowen thinks), then they will demand more services. If a quad-copter breaks with a GoPro camera breaks, who fixes it? Not the investment banker who bought it and not the ten-year-old who crashed it. Factory Joe though has the right skills for just a project. Roll in the “internet of things” and Joe seems like the perfect candidate for a role as the modern plumber. Instead of unclogging drains, he’s soldering circuits.
It’s much easier to speculate with Factory Joe than our real lives, but that’s exactly what we should do. It’s hard to have the same perspective that Adam Blumberg (episode #70) had when he left his job. Blumberg said that he realized right now was the perfect intersection of his skills and the demand for them.
To do this for your own career, think about the advice you would tell a friend. Make up your own Factory Joe persona and write down what you think they should do. Once that mental puzzle is put together, switch your thinking and read it yourself.
Realize that you are part of the way toward a new job, whatever it is.
Robert Greene told James that even though it may take 10K hours to be world class at something, you don’t need to be world class and you’ve probably already got some number of hours. Build on that.
Kevin Kelly (episode #96) calls this idea “1,000 true fans.”
“A True Fan is defined as someone who will purchase anything and everything you produce. They will drive 200 miles to see you sing. They will buy the super deluxe re-issued hi-res box set of your stuff even though they have the low-res version. They have a Google Alert set for your name.”
It means that you, me, and Factory Joe don’t need to to strike out and be huge. We can strike out and stay small.
It’s why both Tucker Max (episode #80) and Rabbi Daniel Lapin give the same advice about your career. That’s about an unbiased opinion if there ever was one. The authors of “I Hope They Serve Beer in Hell” and a “Business Secrets from the Bible” both give the same advice.
Keep your name – and nose – clean
Davidson tells Roberts that there has been a “reduction in employment transaction costs,” which is a fancy way of saying that it’s easier to hire the right people now. Part of being the right person is not being a jerk. On the set Davidson said there was a lot of “professional gossip,” where crew members talked about so-and-so who did such-and-such.
Barrie told Altucher he saw this change with freelancers. It used to be the case where you posted to a freelancer job site and the respondent was in your town or the next. You didn’t know anything about them except what they told you. Now, you can see feedback from someone half the world away.
And it’s coming to every job. In his book, Average is Over, Tyler Cowen writes that he wouldn’t be surprised if everyone had a rating.
“Everything is rated. Everything will have a Yelp review. And if you’re a worker, there’ll be, like, credit scores. There already are, to some extent.”
And it’s going to be easier to do.
Clay Shirky predicted this in 2008 in the book Here Comes Everybody. Let’s start with the big picture:
“Running an organization is difficult in and of itself, no matter what its’ goals. Every transaction it undertakes – every contract, every agreement, every meeting – requires it to expend some limited resource: time, attention, or money. Because of these transaction costs, some sources of value are too costly to take advantage of.”
Okay, got it. So ten years ago it was too costly (in time, money, attention) to find out if Steve was a good cameraman on a movie, or if a factory in China could make a widget. Thanks to technology, transaction costs decreased and organizations got bigger and got more done. Back to Shirky:
“When such costs fall moderately, we can can expect to see two things. First, the largest firms increase in size. Second, small companies become more effective, doing more business at lower cost than the same company does in a world of high transaction costs.”
Great! Now we see that our cameraman Steve was not only a great guy, but really skilled. Word gets around more easily and Steve can travel more easily and we get movies with better cinematography thanks to Steve.
We can also not only visit our factory in China whenever we want, but we can see a live-stream of the production floor and and do video calls and live chat.
The transaction costs for Steve and the factory are both so low that it’s easy to find a great version of what you’re looking for. That means medium and low versions will be passed over and you better create a good Yelp rating for yourself..
Learn to tell stories
It doesn’t seem like the type of hard skill you’d need in the new economy, but it comes up time and time again. Learn to tell good stories.
- Davidson says you need to learn to tell stories because, “you have to be better at articulating the value you add.”
- Cowen writes about this too, “Despite all the talk about STEM fields, I see marketing as the seminal sector for our future economy.”
- Gary Vaynerchuk (episode #2) as well, “no matter who you are or what kind of company or organization you work for, your number one job is to tell our story to the consumer, where they are, and preferably at the moment they are deciding to make a purchase.”
- Recognize biases in how you value your work.
- Turn conditions of fear into ones of uncertainty.
- Use the Cynefin Framework as a decision making model.
- Learn a skill and then become an apprentice.
- Start small in your changes.
- Stay small when you start out on your own.
- Keep your nose clean because everyone can find anything about anyone.
- Learn to tell stories that engage people.
The change is coming, Pearson says, you need to be someone who chooses to “exit up or exit down.”
Whew, thanks for making it this far. I’m @MikeDariano. One note, I was an early reader for Pearson’s book and got to give him some feedback on it. If you read something here that interested you and would like to talk, please get in touch.
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