It is the custom on this first Monday of September to celebrate workers. However, given the current economic climate, it is also a good time to wonder whether the “worker” celebrated on Labor Day is a disappearing species.

Henry Ford created the modern American factory worker at the start of the 1900s by offering high wages in return for their effort and loyalty. This model quickly spread throughout the economy because increased wages generated increased demand for consumer goods, which created more customers for goods produced by the factories. To meet this increased demand, you built more factories and hired more people. The basis of an entrepreneur’s worth was his square footage and head count.

However this expansion started to plateau in the 1960s and 70s, so entrepreneurs needed to look for other ways to increase productivity. Increased mechanization started the decline in employment. Offshoring muscle-based jobs to cheaper countries increased the trend. Knowledge workers thought themselves immune to the trend because brain-based work stayed in-country until that too could be more cheaply outsourced.

In hindsight, the trend to producing more with less is totally predictable. Entrepreneurs are driven by the desire to create value for their customers by doing things cheaper, faster, better. Innovation is the leverage that allows us to do more with less. This is reflected in the traditional balance sheet business valuation, where machines are assets and employees are liabilities.

Politicians and economists now are piling the responsibility for creating jobs on the shoulders of entrepreneurs. I believe this is a grave mistake. ”Job creation” is not a priority for entrepreneurs. I have yet to meet an entrepreneur who is primarily motivated by creating jobs. If job creation is a by-product of increased sales, that’s great, but it’s not the goal.

In the past the entrepreneur’s power came from the size of the factory and of the workforce. Now you can serve thousands of customers from a laptop in your bedroom. Companies whose assets are a few office buildings have higher capitalizations than the big automakers, with all of their factories, machines and workforce combined. The power of today’s entrepreneur is in the number of users.

What does this mean for the prototypical wage-earner? If they hope to return to the way they were at the core of the economy in the 1940s and 1950s, it is bad news. This first part of the 2000s are all about an economic shift as profound as the shift from the agrarian to the industrial economy in the first part of the 1900s.

The solution to the problem of unemployment and the shrinking economy goes beyond just doing more of what was done in the past. The Old Economics leave too many intangibles off the balance sheet: ecological, societal, personal, familial. We need to invent a New Economics that includes all this and more.

The old rules are gone and the new ones are yet to be written. It may take 20, 30 or even 100 years to figure out a new way of measuring value and wealth.

The future we desperately need will be created not by politicians, or by the CEOs of the old guard, but by a new generation of citizen-leaders who are crystal-clear about their purpose, who are powered by the passion of a big vision, and who transform the status-quo by mobilizing communities of people to build systems that create profit and prosperity for all.

For more information

This line of thought is the foundation of my personal manifesto:
http://about.me/coachdavender

Image credit: Stefan Ray (slinky2000) via Flickr
Link: http://www.flickr.com/photos/slinky2000/2175943057
Used under Creative Commons Licence

I use Google Reader to track over 300 blogs and websites on entrepreneurship, marketing and leadership. I share the ones which catch my eye here on my Google profile: http://www.google.com/reader/shared/coachdavender

Here are the most noteworthy of my recent favorites:

My favorite:
2011 may mark the beginning of a golden era for entrepreneurs
via VentureBeat » Entrepreneur Corner by Steve Blank on 12/31/10
http://venturebeat.com/2010/12/31/2011-may-mark-the-beginning-of-a-golden-era-for-entrepreneurs/
The pundits say the American dream is dead and this next decade will see the further decline and fall of the West and in particular of the United States. What if the common wisdom is very, very wrong – and that we will look back at this decade as the beginning of an economic revolution as important as the scientific revolution in the 16th century and the industrial revolution in the 18th century?

Why Words Matter
via Chuck Blakeman on 1/15/11
http://chuckblakeman.com/2011/1/texts/why-words-matter
Six great ideas to help you craft a positioning “handle” that zings

What Exactly is a Business Model?
via TechCrunch by Vivek Wadhwa on 1/8/11
http://techcrunch.com/2011/01/08/business-models-and-teenage-sex/
A clear, logical explanation of the seven basic components of a good business model.

10 business models that rocked 2010
via Board of Innovation by Nick on 1/4/11
http://www.boardofinnovation.com/2011/01/04/10-business-models-that-rocked-2010
A fascinating analysis of some innovative business models that appeared in 2010. I especially like the visual language that Board of Innovation uses to diagram the value exchanges and cash flows of the business models.

AdFreak: Soon, your life will be nothing but Facebook
via Ad Freak by Tim Nudd on 1/13/11
http://adweek.blogs.com/adfreak/2011/01/soon-your-life-will-be-nothing-but-facebook.html
You absolutely have to see this graphic about how Facebook now dominates the Net…and our lives.

For more information

My GoogleReader share page is at:
http://www.google.com/reader/shared/coachdavender

A list of my Google Reader feeds as of October 2010 is here:
http://blog.davender.com/2010/10/what-am-i-reading-a-list-of-my-google-reader-feeds/

Ask five friends to describe, in their words, what you do…you will get back as many different answers. Your “Positioning”, or the set of impressions people have about you, speak so much louder than any marketing campaign or snazzy logo.

In this webinar, you will understand the anatomy of your positioning, and discover a simple process to ignite a powerful word-of-mouth buzz about who you are, what you offer and what kinds of clients you really want.

(Notes, mp3 and other resources below the fold)

For more information

PDF Handout:
http://audio.davender.com/solosuccess/20100415/20100415WordOfMouth.pdf

Audio mp3:

Direct link to audio:
http://audio.davender.com/solosuccess/20100415/20100415_SoloSuccess_WordOfMouth.mp3

Video (under construction)

Facebook event page:
http://www.facebook.com/event.php?eid=362753037364

Some thoughts to help you figure out your positioning message and community of interest:

• What Is Your One Big Thing?
  http://blog.davender.com/2009/02/what-is-your-one-big-thing/
• Can A Target Market Be Too Targeted?
  http://blog.davender.com/2010/04/can-a-target-market-be-too-targeted/

As a solopreneur, money is a constant obsession. Some nights I can’t get to sleep, with all the what-if’s and how-can-I’s running around in my head.

I fantasize about winning $50 million at LottoMax, what I would do with it. Of course I would give a million to each of my brothers, as well as my mother, and endow an educational trust for my nieces, nephews and their children (as well as any kids I would have or adopt someday, in the unlikely event that should happen). But what would I do with the rest?

I read the stories of lottery winners, how they say they will buy a new house, a new truck (it always seems to be a truck, doesn’t it?), go for a trip down south, then put the rest in savings. Several even say they would not quit their job (yeah, right).

But not me. It would all go into my business. I guess that is the difference between employee thinking and entrepreneur thinking.

How are the money worries of an employee different than that of an entrepreneur?

And, even more importantly, will my money worries ever stop?

The money mindsets of the “employee” and the “entrepreneur” are diametrically opposed.

The employee sees money as something fixed and finite, doled out monthly or weekly by a higher power (the employer) in exchange for time (per hour, per day, per year). You get the same as everyone else with a similar job description, regardless of the effort you put in. If you’re lucky (or have a good union), you get a small increase each year, only to see it clawed back by increased fees, taxes and inflation. The only hope to get more money is to get a promotion or to work overtime. And someday, at age 60 or so, you retire and hopefully there is enough pension/RRSP/government aid/investment income to cover your expenses and survive until death…

Robert Kiyosaki has a great definition of wealth: “the number of days you can live at your current lifestyle level without trading time for money“.

The entrepreneur mindset to money is the opposite of the employee. Money is elastic, with an infinite upside…and a total liability for the downside. Entrepreneurs build cash-flow systems, investing time, effort and money up front in the hopes of the machine generating cash over time. The entrepreneur loses sleep about how to keep the cash flowing, like blood coursing through the arteries and veins of this living creature that is the business project.

Many of my money worries happen when I confuse the “employee” and “entrepreneur” approaches to money. If I focus on what I have in the bank account, then I am in a crisis situation, because using the Kiyoaskian definition of wealth, I am not wealthy.

Like most solopreneurs,  I have not yet made the full transition from employee to entrepreneur. I am in a state of limbo where my main income still depends on trading time for money, getting clients and selling my services to them for a time-based amount (so much per session, per hour, per day or per project).

Trading time for money is okay at the early stages of a solopreneur project, but it is not a solution for the long term. I see too many solopreneurs in their fifties starting to realize that they are reaching a literal dead-end: the days they can continue trading time for money are coming to a close, either because they no longer have the energy to be out there hustling to get and to serve the next client, or worse, the market no longer values their time compared to the time of a younger (and probably more up-to-date) competitor.

This is something to lose a lot of sleep about.

And there is no easy way out of it. No matter what you may find about “building a seven-figure business” or adopting a “millionaire mindset”, the only way out is to complete the transition from Employee to Entrepreneur and build cash-flow generating systems.

Solopreneurs like you and me have a great asset: the experiential knowledge in our heads. It is this asset that allows us to consider jumping off the S.S. Corporate in the first place.

The easy part is to monetize our genius with a time-for-money model. But we cannot stay at this stage, because it is a dead-end. The next phase, one that takes lots of courage, effort, and every single penny you have, is to convert your knowledge into free-standing products and services that multiply the value of what you offer.

As an solopreneur, money worries will never go away, they are just different. When I start worrying about 15 or 20 years from now, when I am “supposed” to “retire” and survive on my nonexistent pension or social benefits… that’s when I panic. Because I don’t really ever intend to have much money socked away, even though every RRSP season the need to save for retirement is drummed into us.

But when I remember that I’m playing a different game, the “Cash Flow” game, then this specific fear subsides. The rules for the solopreneur are different. My money worries can shift to something more immediate: establishing the products and the systems that will generate cash flow independent of how much time I trade for money. Every time I earn money (or win the lottery), a good part of that will go back into my project to ensure I build solid systems for the long term.

One thing I know for sure. You could offer me a million, a billion, even One Hundred Trillion Dollars to abandon my vision and go back to a white-collar middle-management job, and I would refuse. I have chosen the entrepreneurial lifestyle, which has caused me to grow so beyond the box that to force myself back into a corporate cubicle would require amputating large parts of who I have become. I have burned the bridges to the employee world.

This is the dilemma of the solopreneur. I’ve signed onto a lifetime project, with no safety net to rescue me, no offramp to a corporate salary, and no retirement date. The price is the loss of certainty about where my next dollar is coming from. I can not afford to coast. So I have to move forward.

But in exchange, I’ve gained the freedom to transform my big vision into a legacy… and this is priceless.

For more information

The “thot” I tweeted that started my train of thought about this topic:
http://twitter.com/coachdavender/status/10974446076

And an article that I saw soon after “Is Your Small Business More Than Just A Job?” (NYTimes.com)
http://boss.blogs.nytimes.com/2010/03/29/is-your-small-business-more-than-just-a-job/

I like Robert Kiyosaki‘s “Rich Dad, Poor Dad” philosphy of building assets instead of liabilities (however I choose to build a cash-generating business first before diving into investing)
http://www.richdad.com
and the book
http://www.amazon.com/Rich-Dad-Poor-Money-That-Middle/dp/044656740X/

Another resource I recommend is Michael Gerber‘s “The E-Myth”
http://www.amazon.com/E-Myth-Revisited-Small-Businesses-About/dp/0887307280
and the site http://www.e-myth.com

CAUTION: With Kiyosaki’s and Gerber’s books, even though there is a lot that I like about them, there is also a lot to be cautious about. If you want to discuss these books with me to find out more about what I recommend and what I don’t, simple give me a call or drop me a line…

I received an interesting blog post by Michael Port about the incident during a retreat led by James Ray last October in Sedona that resulted in three deaths and several injuries. Today (January 8) is the 90-day anniversary of this tragedy.

Michael decries the silence of the personal development profession about this tragic incident. He starts his article:

“The tragic death of three people attending a “spiritual retreat” with James Arthur Ray has made me so angry that I’m having trouble finding words to express myself. But I’m going to try because, to me, silence is acceptance—and there has been a deafening level of silence from other “teachers” in the spiritual-help “community.” Though, I am not in the “spiritual-help” business, I do write business-help books, and am close enough to, and sometimes, much to my annoyance, associated with James Ray’s corner of the self-help market, that I’m embarrassed and ashamed that I haven’t spoken up earlier about these teachers and their tactics. What happened in Sedona on Oct 8, 2009 was unacceptable. This is not the first time a narcissistic sociopath with a god-complex has lead people to their deaths and unfortunately it won’t be the last time.”

The post continues with a condemnation of James Ray’s tactics:

“From all accounts, James Arthur Ray’s tactics at this retreat and elsewhere, are coercive and manipulative, designed to strip followers of their power, and might I add, money. (…) Not only was Ray presenting himself as a spiritual guru promising spiritual enlightenment, but also as a business advisor offering profound economic improvement in business. According to an article on cbsnews.com, “The self-stylized success guru says people are ready for his wisdom if “You simply (and deeply) want to make more money and become more successful” and “want to double, triple, and even multiply by ten the size of your business.” “

I notice, especially among coaches, that we try to promise bold transformations in material wealth, by using “spiritual” words.  Obviously, if this kind of marketing talk works for the big guns in the industry, it should work for us, right?

But there lies a road that leads to the dead-end of the “guru trap”, when we get too wrapped up in our own hype that instead of being focused on meeting the needs and expectations of our clients, we crave the attention – and adulation – of our clients.

Avoid projecting a positioning that promises that people can get something for nothing – promoting the “big lie” that entitlement comes before effort.  Its sexy but dishonest.

The message of my previous blog post about under-promising and over-delivering fits well in this discussion.

When you market your services you must keep it real. By avoiding the hype, and staying grounded and real, you will attract clients who value what you offer and who are willing to fully commit to you. And these are the best types of clients, because their clear-eyed commitment makes them partners for the long term.

Here is the response I posted on Michael’s blog:

“Michael, I share many feelings with you about this whole affair.

This debacle has made me hyper-aware of falling into the “overpromising” trap. Last fall, I went through some soul-searching about my positioning and my promises, and I actually pulled out of an event that I felt was going into a super-hypey marketing mode.

What you’ve reminded me through Book Yourself Solid is to focus on communicating compelling, relevant and grounded results…and to make sure that I have the means to follow through and deliver on these promises. I invite my clients to adopt a “healthy skeptic” viewpoint on the work we do together: test what I recommend, see if it works for you. If it does, keep it, if not, modify it so that it does. Seek to understand the principles behind what I’m proposing, and use them to develop your own “philosophy” or approach.

I don’t want clients who see me as a “guru” (although I have the right name for one :) I want clients who want a partner in their development, who see me as a real person on the path they want to take. And I want clients who will become colleagues and peers as we share the journey towards transforming our dreams and our projects into reality.

I love watching your evolution, Michael, as you say or do things which work and say or do other things that don’t work as well. I don’t agree with you all the time…but it’s the nuggets that are pure gold that make our relationship very worthwhile. You are human, and you let the people around you be human also. Watching you in action inspires me to Think Big and Act Even Bigger. And that’s who a Role Model should be.

Thanks for sharing your heartfelt message.

success
-davender”

For more information

• Original post by Michael Port:  http://thinkbigrevolution.com/profiles/blogs/michael-port-speaks-out-about
• Google search on the Sedona incident (for the backstory, news reports and a lot more info): http://www.google.ca/search?q=james+ray+sedona
• Blog post: Self-Help’s Big Lie: http://blog.davender.com/2006/01/self-helps-big-lie/
• Blog post: How To Make ‘Em Smile – Promise Less, Deliver More: http://blog.davender.com/2010/01/promise-less-deliver-more/

Are we in a “recession” or in a “recovery”? Who cares? What real, practical impact does the state of economy as described by the media and the government have on solopreneurs like you and I?

An op-ed piece by David Brooks on NYTimes.com had me thinking about this. His column, titled “The Protocol Society” talks about the shift in Western economies from the 19th and 20th century focus on making stuff (corn, steel, trucks), to the 21st century basis of the economy: sets of instructions such as software, processes, and intellectual property.

In my opinion, what makes being a solopreneur possible in this day and age is that we can leverage our ideas and skills to create parallel streams of income. This is the distinction between a solopreneur and an artisan: the artisan is a self-employed person who makes things or delivers a personal service, and since only one thing can be produced or service delivered at a time, the earning of an artisan is linear. I’m thinking of some people I’ve coached in the past: a furniture reupholsterer, a plumber, even a dentist. No matter how advanced or specialized is their knowledge, the business model that they’re forced into creates linear income.

But when you take that knowledge or skill and transform it into “protocols” – organized information – then you can move from a linear income to a parallel income. Solopreneurs can leverage ideas and technologies to produce much more value from a time unit of work than if we were building widgets or serving customers on an individual basis.

David Brooks makes a a key distinction between the classic physical goods economy and the new protocol economy: physical things are finite, you can use them up, and therefore responds to the law of supply and demand. But the protocol economy, based on ideas, has no such limit.

What does all this mean for solopreneurs? Here are some ideas that came to me as I considered this concept:

- We are individually responsible for creating our own “economy”. In the “Protocol Economy” our personal economic health is ultimately dependent on our willingness to take action and get things done. Because what we offer (ideas, processes, intangibles) is not limited by finite supply or demand, overcoming the inertia of our business is solely dependent on the force of our courage.

- Prosperity is directly proportional to the speed of innovation.  To prosper in the “Protocol Economy” you need to be constantly innovating, trying new processes, ideas. Because the world is so complex, if you spend all your time trying to figure out all the variables before you launch, well, you will never launch. The faster you innovate, the faster you find what works. This goes straight to the basic formula for success as a solopreneur: “FIRE”,”AIM”,”FIRE”. Shoot first and then see what you hit. If it’s good, continue aiming there, otherwise abandon it and try something else. The other benefit of speeding up your innovation cycle is that you generate that many more ideas, and since ideas are the fuel of the protocol economy, you will always have something to move forward with.

- Money is not essential to create money. In the traditional economy, you need capital to start up, in order to underwrite the means of production and cover the cost of sales. But in the “Protocol Economy” the cost of production is so low that you can make a much better return on your investment of time and money. What is especially interesting is that you can start even before you are clear about the “revenue model”. More and more businesses are going this route (Twitter and Facebook are the highest profile examples). So throw away the rule book that says you need startup capital, bypass the banker and the government subsidy, and start making offers. Sell first, then design, build and deliver. That way you can see if there is any interest in what you have to offer and adjust your processes to meet what people are looking for (connects to the previous point).

- The protocol economy is not rational. In the protocol economy, the buyer acts first on emotion then “justifies” with reason. The buying decision is driven by the emotion of desire, since we’re operating higher up on Maslow’s hierarchy of needs (belonging/esteem/self-actualization). Therefore the buyer chooses their provider based on the level of trust (= emotional) and also how the provider can enhance the fulfillment of their desires (referring again to Maslow’s hierarchy).  This means to stop focusing on the features of what you offer and focus on how it helps the purchaser fulfill their desires.

- Be the “Top Gun”. The expression “Top Gun” comes from a course I took with Master Coach Bea Fields. When you are perceived as the Top Gun, you become seen as the expert in your field, and you attract more and better clients who appreciate what you have to offer and who are ready to commit. As you become more outstanding, you command a larger and larger sphere of influence, and you get to “cherry pick” clients who are the right fit for you. This demolishes the old “supply and demand” economic model, especially for services (“protocols”). The old models assume equivalent competency between providers (and therefore no differentiation). When you are the “Top Gun” you create your own economy, independent of supply and demand, because clients will beat a path to your door…you are that good!

- Success in the protocol economy comes down to one word: “Systems”. Systems differentiate, define and duplicate. First, systems differentiate how I provide my training, coaching and consulting service from a colleague’s similar offering. How I define and execute my systems will give you, as the buyer, a different experience from the other person.  Second, systems define.  If you go to the same restaurant today and next week, you expect a similar result. You also want your order prepared correctly, predictably and with high quality. You can have the most brilliant chef in the back, but if the systems are not in place and properly executed, then the trust is broken and the diner will go elsewhere. Highly reliable and consistent systems take care of all of the little details and free you to build a relationship of trust with your clients, which defines the value they perceive you to provide. Most importantly, well implemented and executed systems take the knowledge and skills out of your head and into the world: this is the key to leveraging your time and creating parallel streams of income, basically duplicating your ability to produce.  Because systems design and execution is so important, this year I will be making it a top priority for my own business as well as the businesses of my clients.

We need to get out of the old way of looking at business – finite markets, supply and demand, competition – and adopt a new way of thinking about what business in the 21st century is all about: innovation, collaboration, connection. The beauty of the “Protocol Economy” is that because success is no longer dependent on the physical resources you possess or control right now, prosperity is within the reach of each one of us – it only depends on our courage to move into action. There is a revolution happening in our economy and our society, and all of the trends point to the next decade being a wonderful playground for bold Solopreneurs.

To me, the closing paragraph of David Brooks’ article sums this shift beautifully: “When the economy was about stuff, economics resembled physics. When it’s about ideas, economics comes to resemble psychology.” Because Solopreneurs are light and agile, we are perfectly positioned to prosper.

In what way does this idea help you create better results in your business? I’d love to discuss this with you. Please share your comments below…

For more information:

Read the original article by David Brooks here: http://www.nytimes.com/2009/12/22/opinion/22brooks.html

David Brooks mentions a book about this idea, “From Poverty to Prosperity: Intangible Assets, Hidden Liabilities and the Lasting Triumph over Scarcity” by Arnold Kling and Nick Schulz
Amazon.com link (no affiliate): http://www.amazon.com/Poverty-Prosperity-Intangible-Liabilities-Scarcity/dp/1594032505

Reason.tv features an interview with Arnold Kling and Nick Schultz:

View directly on YouTube: http://www.youtube.com/watch?v=–QaJ-VEXXU