One thing that separates our businesses from traditional “start-ups” is funding. We “fund” our businesses through savings accounts, liquidated 401Ks, credit cards, day jobs, and sweat equity. Mine was mostly the latter.
But what if you had access to investors beyond friends, family, and your Priceline Visa with William Shatner on it?
This exists to an extent in crowdfunding platforms like Kickstarter and IndieGoGo. However, in these platforms, the people giving the money are just “givers” not investors. Money is given like gifts with neither a tax deduction nor a stake in the business.
According to Annie Lowry at Slate.com, micro-investing is currently disallowed by SEC regulations. So while Kickstarter’s model is completely legal, creating a crowdinvesting platform would be illegal:
True crowd funding is different, because it would enable investors to become partial owners of the business, not just lenders. Under current law, that is often illegal. A longtime Securities and Exchange Commission rule, designed to protect unsophisticated investors, limits the number of stakeholders certain private companies can have.
If you hit 500, you often have to go public. That means opening your books to additional scrutiny and your business to the whims of the market. And being public is just not a feasible option for a tiny business looking for start-up funding. Thus, an artist can receive thousands of $5 donations on a site like Kickstarter, but an incorporated farmer cannot accept investments from thousands of interested small-timers.
What if this were different?
The now-dead American Jobs Act proposes making a change to this regulation so that businesses could responsibly gather small investments totally up to $1 million.
How would your business be different if you had $1 million available to you?
As a business owner…
- Would you dream bigger if you had access to capital?
- Would you operate your business differently if others were literally invested in your business?
As an investor…
- Would you be more or less inclined to give money if your dollars were an investment and not a donation?
- What kind of risk would you be willing to take on?
Considering changes to regulations like this is New Economy thinking at its best. But we need to thoughtfully consider how we would approach an emerging opportunity like this.
I want to know how this would change the game for you either as an investor or a business owner (or both!). Leave your response below!
How did you set your very first self-employed, entrepreneurial hourly rate?
Pat yourself on the back if you did some research on competitors, crunched the numbers on the amount of hours you could bill & the amount you needed to earn, and set a rate that reflected both.
I didn’t do that when I started my business. And I hear that many of you didn’t either.
Most of us didn’t set out to become consultants, freelance designers, and New Economy entrepreneurs. Nope, we got our liberal arts degrees – or misguided business management degrees – and tried to enter a job market that didn’t want to have us.
We talked about experience (or lack thereof) instead of value, of skills instead of significance. We polished our resumes and customized cover letters.
And we got jobs ranging from $10-15 per hour.
And we cursed our parents for telling us we could be whatever we wanted to be when we grew up. We cursed society for wanting automatons instead of freethinkers.
Frustrated & desperate, many of us have stepped off on our own. We gather in coworking spaces, corners of the internet, and networking events. We talk about doing business differently and making money with meaning.
But many of us are still holding on to the one thing that threatens our ability to make this happen: the way we price our work.
We’re grounded. We’re grounded by the traditional employment model we’re trying to escape. We’ve been sitting on the tarmac with no hope of taking off into the wild blue yonder or our vast earning potential.
So what gives?
An opposite phenomenon is at work in pricing. “Anchoring” is the practice of using a cost-prohibitive product to make another product seem reasonably priced.
It’s not always a scam – it’s often just smart. For example, I offer individual coaching at one rate and more affordable group coaching at a second rate. You know you’re receiving a comparable service with stellar results but the lower price on group coaching looks much more accessible. Without the individual coaching price (more than double!), you might still balk at the group coaching price.
With wage “grounding,” we are setting rates based on old employment models.
When I first set my consulting rates, I set them at $25 per hour. That was double what I had earned before so I figured that was a great place to start.
But the reality of self-employment is nothing like the reality of traditional employment. Double my old wage still resulted in working for pennies per hour. Sound familiar?
The first step towards beating this grounding effect is to realize that it’s happening and then to declare:
My previous jobs do not define my current or future value in the market.
Okay, I’ve done better with rallying cries. But sometimes straightforward is where it’s at!
Go ahead, say it out loud:
My previous jobs do not define my current or future value in the market.
Most likely, in your previous employment situations, you have had to fit your skill set into a predefined container. That container came with a price tag (the lowest price someone could pay another human being to do that work) and, while you may have had some negotiating power, the price was set.
You are no longer defined by a job “container” – you are instead constantly defining & redefining the skills that are of value to you and your clients. This gives you the opportunity create the optimal circumstances for your earning.
If $50,000 – $80,000 – even $150,000 per year or more has never seemed realistic, you can create circumstances in which they are.
Your earnings are not determined by what you have earned in the past but by the optimal circumstances you create around the valuable skills you have.
Your past wage is rendered obsolete.
You can choose to be grounded by your past wages or you can choose to be anchored by your goals.
You can choose to bemoan your past or celebrate your earning potential.
You can choose to concentrate on the going rate for your skills in the traditional market or you can create your own market based on what makes you unique, highly qualified, and oh-so-perfect for the job.
What’ll it be?
The only way to do great work is to love what you do.
– Steve Jobs, 1955-2011
What is the future of work? If the Creative Class is not a lie, if the jobs really aren’t coming back, what does it mean to be “employed” now? 5 years from now? 15 years from now?
That’s what I wanted to talk to Dr. Susan Bernstein about. Susan is both an MBA and a PhD. She studies the way we work in relation to the [dis]connection between our minds & our bodies.
She wants your work to not only tickle your brain but to feel good in your body.
In short, Susan believes that it’s not so much about finding the perfect job nor is it about everyone quitting organizational employment to work for themselves (even I agree with that!). Instead, she wants you to discover the skills that turn you on, mentally & physically, and then to match those skills with problems that need to be solved.
Even the playing field between those who want to work and those who need work done.
I love how she talks about skills. I think it relieves the pressure one feels when “trying to find her passion.” It’s not finding the one thing that is your passion – it’s discovering how work can make you feel passionate. See the difference?
Watch the video and then tell me:
What do YOU think is the future of work?
Susan is currently running a HUGE series on discovering & utilizing your own Kick Ass Confidence. Highly recommended.
Disclosure: Susan is my client. But she’s awesome and has a fascinating point of view. You don’t mind, do ya?
I dedicate this post to Steve Jobs. His work changed my work. And my life.
Thank you, Steve.
The jobs just aren’t coming back.
They left on what was supposed to be a round-the-world cruise and the ship sank somewhere off the coast off China. Recession is supposed to be a cyclical phenomenon where what is lost comes back to us in spades.
One part innovation, one part government intervention. And sometimes one part war for good measure. Hard times are temporary.
Not this time, it seems. Things just refuse to go back to “normal.”
It seems this led Scott Timberg of Salon.com to announce yesterday that the creative class is a lie. Timberg would like you to believe that this “utopian” society where you can get a job with a master’s-degree-in-just-about-anything is too good to be true. Salon would also like to sponsor your prescription for Zoloft and help you settle your credit card debt.
Okay, I made that last part up.
Timberg paints a dismal picture of what is happening now, economically speaking, without providing any sort of recommendation bringing about a brighter future for the world’s brightest minds.
I’ll grant him one part of the thesis: the transition from old economy to New Economy is not an easy one. And it doesn’t involve the return of the jobs.
The rest of their thesis is myopic. While Timberg was quick to point out that “the Creative Class” was hard hit in the economic downturn, they failed to consider how Richard Florida (the sociologist who made the phrase popular) described the great reset occurring in today’s reality:
The Great Reset … [is] the result of the multitude of tiny resets that individuals are making all over the world.
The root of the problem is not that college grads and highly trained professionals are out of traditional work. It’s that they’re being told to look for “jobs” at all.
We need to forget trying to jump start the economy in all the old ways and start educating individuals on how to make their own tiny resets.
These tiny resets are fueled, not by economic policy, but by the spirit of innovation and a willingness to think beyond the status quo. Why mourn a system that kept so many imprisoned by their own paychecks?
Daniel Pink – curiously missing from the list of visionaries Timberg quotes – describes the greater shift as such:
We are moving from an economy and a society build on the logical, linear, computerlike capabilities of the Information Age to an economy and a society built on the inventive, empathic, big-picture capabilities of what’s rising in its place, the Conceptual Age.
This isn’t a top-down shift. This is bottom-up. That’s why the rest of his book, A Whole New Mind, is dedicated to teaching people how to survive in age that was taking shape. This book was written at least 2 years pre-recession. And yet, it describes in detail the skills need to hoist oneself out of the mire of what would come.
Pink never claims these skills are easily acquired. But he does lay out a framework for adding them to the palette of colors one has to paint their own picture of fulfilling work.
Just last week, Seth Godin also described the difficult work that was required of the creative class:
The future is about gigs and assets and art and an ever-shifting series of partnerships and projects. It will change the fabric of our society along the way. No one is demanding that we like the change, but the sooner we see it and set out to become an irreplaceable linchpin, the faster the pain will fade, as we get down to the work that needs to be (and now can be) done.
Both government and the media get it so very wrong. The focus cannot be on the return of jobs. It must be on the cultivation of skills and the realization of a new mindset for creating work that produces value for others.
We can no longer rely on the old ways of paying bills and putting food on the table.
Creating our own work – and a new landscape for prosperity – is the ultimate task of the Creative Class.
And it’s one we’ve only begun to pursue.
Edited to add:
Creating your own work doesn’t necessarily mean self-employment. Creating your own work is more about self-awareness.
What are you truly good at? When do you have the answer that no one else has? What problems are you uniquely gifted to solve?
This is not about creating a go-it-alone economy. It’s about understanding how we work best together.
Hat tip to Nicole for putting me to the Salon.com article.
And now for something completely different.
I have deep love for college students. And soon to be college students. And just graduated college students. And really anyone who feels like they are maybe sorta still a student and not quite a “grown up.”
Mostly because I still maybe sorta still feel like a student.
Stepping on a college campus is electrifying for me. The hum of the institution is pleasantly deafening.
I’ll make just about any excuse to go to a college. Note: if you happen to be a professor or administrator at an institution of higher education, let’s talk. I’d love to talk to your students about entrepreneurship, new media, and the value of creativity in the New Economy.
So when I heard that Sarah Von, of the blog Yes and Yes, had created a Post-College Survival Kit I wanted to get me some of that. I wanted to talk to her right away and find out if she loved college students as much as I do. She does.
Her course – which you can still get in on live, live, live – is geared towards recent grads or those in similar situations. But our interview is for everyone. The state of higher education and the preparation of the next generation is everyone’s concern.
Here’s what we talked about:
- What assets do does a recent college grad have that most students don’t think about or leverage?
- What did Sarah do right after graduating? What would she do differently?
- What is the number one thing most college students are missing from their experience of the world?
- What should college students concentrate on attaining for themselves? How should they be measuring their life-after-college experience?
- What’s Sarah’s vision for the world’s youth as they grow up?
Or download here. (right click then save as…)
Lola has wanted almost nothing to do with me lately.
She shouts, “No! No! I want daddy!” When I try to get her out of bed in the morning or when I try to give her a bath.
My husband – being responsible for an almost 3-year-old most hours of the day – is frazzled.
I’m frazzled too. I want to cuddle up to my tiny girl and kiss her soft whispy hair. I almost long for those days she wanted me and nobody else.
As I stood looking over the edge of her crib Saturday morning, trying to coax Lola to let me pick her up – whilst having zero success – Mike sauntered into the room and said, “It wasn’t so long ago the tables were turned.”
Yes, I remember.
My paranoid mind would have me believe this shift happened when I started working full-time. My intellect knows 3-years-olds are fickle and this phase has nothing to do with my choice to work. She’ll be back on my hip before long.
But I still struggle with my role as “mother,” especially in the light of Mother’s Day.
My client, Dr. Andrea Doucet, a sociologist who studies breadwinner moms & caregiving dads, wrote a Mother’s Day piece for PhD in Parenting. She shared the stories of many moms who have different views on mothering versus parenting. And it left her main question, “Are you still the mother?” reverberating in my brain.
I find my role ill-defined but my gut – literally – quite sure of my motherhood.
There is something primal there, but we needn’t define it, and setting limitations on gender-based identity discourages the possibilities within our scope of what it means to be human. Mothering comes in many blessed forms!
— Kristin, comment on Are You Still the Mother?
Many moms dream of parenting full-time and building a business during nap time. Practical circumstances and my own unyielding ambition made that unrealistic for me. While my day to day includes few traditional “mom” activities, I still feel a deep connection to motherhood and all the heart-straining, gut-turning emotions that come with it.
The primal awakening that occurs with the advent of motherhood – either biological or adopted – is the same primal awakening that allowed me to birth my business.
To deny my desire to nurture & grow my business would – for me – also deny my true relationship with my daughter.
Certainly, I do not see my daughter & my business as equal but I see a certain symbiosis in their existence. When another mom speaks of family as always her first priority, I wonder how she can see her business outside of the success of her family. It’s not a judgement call on my part but a yearning for a deeper understanding of the relationships of my own family.
I may be a business owner, leader, and breadwinner, but I am equally mother and woman. Where others see duality, I see connection. Where others see choices, I see inevitability.
My family and my business grow together. And I? I am the mother.