Some of you may already be familiar with this statistic that has been making the internet rounds: at its absolute peak, Eastman-Kodak was able to employ more than 140,000 people across the world, mostly in the United States. At the time Facebook saw fit to acquire Instagram at a billion-dollar valuation level, the company only had 13 employees on the rolls.
It’s a real-life illustration of the theme I hit quite a lot on this site: the changes in technology will bring untold riches to the owners of the rapidly growing assets, but it’s not going to bring collateral benefits to people that are conveniently geographically located next to these burgeoning businesses.
The just part of this change is that the people who are creative and willing to add their labor to make their creative visions a reality will be wonderfully rewarded for the value they deliver to their customers. The unjust part, on the macroeconomic level across the country, is that it continues to strain the informal social contract that existed in America for much of the 20th century, in which the terms were, “If you’re willing to work hard, there’s always going to be a spot for you to get a nice little something for yourself.”
Here’s where you should get excited:
If you have ever thought about starting your own business, the rewards have now shifted so that you can benefit now more than ever before.Always be thinking in terms of what you can deliver that is a rare skill or unique process that is valuable to others. When I was growing up, I always had teachers tell me to prepare for the “global economy.” That turned out to be a platitude devoid of actionable meaning. I’m not going to be a professional mediator in Hong Kong dealing with clients from Ethiopia and Ireland. On the other hand, if you’re the only person that can process trash in the middle of James Town, Wyoming, you’re going to put together a good life for yourself by ignoring the grade-school lesson on “globalization”. Rarity, specialization, unique knowledge, and similar characteristics will always win out.If you realize this truth, you will engage in a rapid fire pursuit of owning high-quality assets. If you can see that life on the ownership side is going to be much sweeter than life on the labor side, why not use your labor as a means to acquire ownership? Most people, of course, won’t do this. As Charlie Munger has said repeatedly, “the first $100,000 is a bitch” and serves as a huge deterrent that prevents people from pursuing long-term wealth creating strategies. Once you grind it out to that point, though, you’ll find yourself “automatically investing” $500 per month just by checking the “reinvest dividends” box for the assets you already own.