Thursday, January 15, 2009

On the Benefits of an Economic Downturn

I've been self-employed now since August 2002. This is my second attempt at being self-employed, but only my first successful one. My first attempt, which ended about five years before that, was very much a learning experience, and a painful one in many ways.

Let's be frank: Working for yourself is scary and sometimes stressful. Unless you are phenomenally successful, you never lose that little bit of fear about whether you'll be able to get another gig when your current one ends. It's definitely not as comfortable as a steady paycheck with nice benefits and a 401k by any stretch of the imagination. You rarely get to work just 40 hours a week. There are no quarterly bonuses, and no stock options. When you take a vacation or a sick day, you don't get paid.

But, the comfort of a steady paycheck and everything that goes with it is really a false comfort in the U.S. Almost every state has "at-will" employment, which means that a company can fire you at any time without reason unless they violate contractual or civil rights in doing so. That means, the comfort is an illusion, though it's an illusion that holds up well in a good (or at least a stable) economy when working for a moderately well-run company. But, in a poor economy, you start to see the Emperor's clothes for what they are.

I still fret, periodically, about making enough money and about getting work. I think that's actually good. It drives me in a way that I never had as an employee. And I was a pretty good employee.

Today I heard some news that made me fret a little less for myself and a little more for some others. You see, I spent almost two years on a project in Des Moines working for a large financial institution. I read recently that that financial institution laid off a whole bunch of people in the office where I spent most of my time. Nobody I knew well was laid off, but there were several people whose names and faces I know. Some of them had been in their "comfortable" jobs for nearly twenty years and really just don't know what they're going to do.

So, where am I going with this?

Here's the thing. A hundred years ago, only ten percent of people in the United States were employed by someone else. Roughly ninety percent of people owned their own business or were self-employed. Granted, quite a few of those people were scratching out a living doing subsistence agriculture, but still, it's a remarkable fact nonetheless. It was one of a handful of things that really differentiated the United States from the rest of the industrial world. It was one of the things that made people want to come here from all over the world.

Today, those numbers are pretty much reversed. Over ninety percent of people work for someone else, and most of those people work for corporations. It is not necessarily good for our society as a whole to have so many people indebted to large corporations for all of their basic needs. The term "wage slave" may be hyperbole and overused, but there's some truth behind it. When someone supplies you with the ability to feed, clothes, and house yourself and your family, you feel terribly indebted to them, even if that "someone" is a fictional corporate entity, and even if you are giving them good and valuable work in return.

Keep in mind that corporations exist solely to make a profit. I'm not opposed to profit, by any stretch of the imagination, but I am opposed to profit being the sole, or even the primary motivator for the bulk of decisions that affect our daily lives. Profit-as-sole-incentive is what led to many of the most serious problems in history. Anyone remember Enron? The Great Depression? Society would benefit from more entrepreneurs and less corporate drones. I could write a book on the potential impact of even ten percent of current corporate employees becoming self-employed. Most people don't realize just how much of our culture and jurisprudence is driven by corporate greed. Almost everything the average American reads, hears, or sees in the course of their day was paid for by a corporation.

Now, nobody likes a crappy economy. But, in the long run, there are going to be some benefits to this downturn. It's already started to strip way the veneer that is the idea of "safe" corporate employment. When the perception that corporate employment is no longer "better" than self-employment, more people will try being self-employed. Hell, the sheer number of people losing their jobs is likely to make at least some people turn to self-employment simply for survival.

Even though, in this very blog, I have lamented the Gold Rush mentality surrounding the iPhone App Store and have been known to bemoan the level of competence of some people who hold themselves out as "iPhone Developers", I think (on a whole) that it's a good thing that more people are looking to be their own bosses. It's a good thing for society, and it's a great thing for the iPhone as a platform. Apple has basically built a scaffold for technology-oriented entrepreneurs and have lowered the barriers to entry tremendously. Sure, Apple is taking a piece of the pie, so a corporation is benefiting from all this, but that corporation is, in the process, enabling the income of an awful lot of individuals and small companies without having direct control over them. Despite the issues and complaints that many people (including me) have about the way Apple runs the App Store, it is still indisputably one of the greatest opportunities in recent history.

I mean, you can develop an iPhone app on a used MacBook with a first generation iPod touch, and the potential for profit is limited only by your ingenuity. You have immediate access to over 20 million potential customers for $99! Do you know of any other business you can start these days with comparable profit potential for the cost of a used laptop and a used iPod? Sure, not everybody is going to become a millionaire. Not even everybody's going to be able to make a living writing iPhone Apps. But almost everybody has the same opportunity to succeed if they're willing to work at it.

And that's pretty cool.



7 comments:

Michael said...

Interesting to hear a USA perspective. Here in the UK, "jobs for life" ended in the 80s recession but nevertheless many people still were able to stick with one job doing the minimum to maintain a relatively comfortable existence. Not necessarily a bad thing but these are the people that will be first effected by the downturn. Redundancies are just starting to hit the headlines.

I've been self employed for many years - mainly developing web databases using a propriety solution called 4D. I don't earn huge amounts but I earn enough. More importantly I get to choose what I do, when and most importantly what I'm interested in.

This for me is the key. I started developing iPhone Apps out of interest and I love it. Implementing what I believe are useful tools in a new development environment (well for me) is great.

If my other works dries up then I will have more time to develop iPhone Apps and I'm sure I can earn at least enough to survive.

6 months ago this market didn't exist. In another 6 months we will have Android and Blackberry Store...maybe its a good time to be self employed.

M.

Eric Busch said...

Wonderful article.

And you deserve all of your recent success :)

xeleh said...

Thanks for this article, Jeff.

cjr said...

I mean, you can develop an iPhone app on a used MacBook with a first generation iPod touch, and the potential for profit is limited only by your ingenuity. You have immediate access to over 20 million potential customers for $99! Do you know of any other business you can start these days with comparable profit potential for the cost of a used laptop and a used iPod?

Long live the bedroom developer! I would love to work for myself and iPhone development is really an opportunity that is too big to miss, coupled with the fact that one doesn't need a large outlay.

Kevin Rossi said...

I agree whole heartedly. I know it will be a tough road at times but I plan on following in your footsteps very soon. My wife and I are going to travel through Europe while she writes and I attempt to program web and iPhone apps. It is a risk, but it is something I have to try at least once.

Thanks for the pep talk,

Kevin
ChasingTheWorld.Blogspot.com

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h4ns said...

What youre saying is completely true. I know that everybody must say the same thing, but I just think that you put it in a way that everyone can understand. I also love the images you put in here. They fit so well with what youre trying to say. Im sure youll reach so many people with what youve got to say.

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