THE BLOG
06/04/2013 11:04 am ET Updated Aug 04, 2013

A Future Where Everyone Is a Startup

Technology innovation, disruptive new business models, and outsourcing have, and will increasingly continue to, make many jobs irrelevant. Robots are the new middles class. New technologies make old ones, and the corresponding jobs, irrelevant. What used to be done by an entitled young adults with a graduate degree is now being done by growing populations of hardworking and intelligent people abroad.

Personal computers rendered the typewriter obsolete. Travel agents have been replaced by online flight and hotel booking services. The Internet has crushed the music industry. Advances in telecommunications are disrupting the transportation industry. Collaborative consumption is disrupting hospitality and other industries. And the list goes on.

Labor and jobs will change significantly as a result of these changes.

Corporate Innovation and the Efficiency of Startups

Large, established companies have competitive advantages like distribution, data, domain expertise, and resources that should blow any startup out of the water, yet we continually see scrappy startups out-executing them.

Naval Ravikant credits the principal agent problem for why startups can be more effective than large companies. Entrepreneurs are principals, that is they are dedicated to that they are doing and have ownership of it. As opposed to agents who do not have upside, or fear of downside. It seems individual ownership creates more value than economies of scale, but doesn't show up on financial projections or balance sheets.

Increasingly, small businesses and entrepreneurs will be able to act like giant ones. Cloud computing provides access to huge processing power and storage. New distribution channels such as twitter and Tumblr is redistributing power descending from government and large corporations to anyone saying thing people want to hear. We're all walking around with hardware in our pockets that has capabilities at a fraction of what it would have cost previously.

The next generation of "mom and pop business" will be technology enabled companies. It will only get easier for entrepreneurs to launch new products. In fact, I think we'll see hypercompetition amongst startups. Which will make for a more efficient economy in the long-term. The question will not just whether to buy a product or not it will be whether to build it yourself instead of buying it.

There is simply less need for human capital. Smaller teams can do more than ever before.

Peer to Peer Commerce and Collaborative Consumption

The Internet is eliminating the need for middlemen and enabling business transactions between civilians that were not possible previously. Products and services that were previously be done by businesses can now be done by anyone.

"We are losing trust over time in our institutions, our banks, our governments...they can't fuck us over anymore, it's just enough, and so we need to come up with something new that we can trust in, and a lot of these institutions that we're gaining trust in are on the Internet, and they're communities."
-Fred Wilson

Structural inefficiencies in the labor market caused by technology innovation provide opportunity for new companies to connect excess labor with supply. Fewer jobs means more underemployed people. Combined with increasing wealth disparity, there is tremendous opportunity in connecting people with disposable income and those seeking work. Companies like TaskRabbit and Homejoy are doing just that.

Sociology and Hiring

Studies show people increasingly demanding freedom and flexibility. For companies, having consultants, freelancers, or contractors has many benefits: 1) no need to pay benefits, 2) less need for supervision, 3) less or no need for physical space, 4) because companies will increasingly need to have eyes and ears of what is happening outside, they get people with a view of the outside, and lastly 5) potentially a more productive workforce because 9-5 is not conducive to everyone's circadian rhythms and employees feel more rewarded.

Short-term vs long-term effect

Though innovation that kills jobs is of course not good in the short-term, I do believe it is very good in the long-term. Innovation presents exponentially more opportunities for entrepreneurs that create exponentially more jobs. And being spared relatively undemanding tasks frees people to deal with more complex ones -- increasing productivity.

Conclusion

Our economy is going through a structural change and the job market will never be the same. The most valuable skills of the future will be those that can't be outsourced automated. Everyone should view themselves as entrepreneurs. Recent history has shown that previously considered "stable jobs" aren't so stable anymore. It's important to diversify the things you are working on so no one company, customer or boss can make or break you. Companies and individuals alike will need to adapt.