What is the Goal of Your Business?

A friend sent me this article about the future of entrepreneurism in the world. In short, the central thesis is that the giant companies are entrenched in their industries, and it’s harder to compete with them given their incumbent status. Thus, it’s far better to stay small, keep costs low (the key theme in my book!) and make “subsistence” level wages that replace a day job. For example, a local plumbing business is like this. At most, it may grow into a handful of employees and service the surrounding cities, but it doesn’t want to scale up and become a national presence (is there even a comparable national business that provides plumbing?). That’s too much investment, hassle, work, and time before the eventual payoff. That’s not to mention the bureaucratic headaches in providing benefits to employees, building up marketing, HR, and legal departments. In the face of this, it’s quite logical that many a business owner is quite comfortable pocketing $200,000-$1 million in yearly profits from operating a small business.

Side thought: this is a workable theme for a business concept. Uber’s premise is that it provides a single app that links service providers (taxi) to customers anywhere in the world. One could argue that independent taxi drivers and companies could have preempted Uber’s rise by banding together and making an easy to use and interoperable app. In any case, we can extend this concept by applying it to things like plumbing services. Imagine if you can access a worldwide network of plumbers at your call on the app, without having to fumble through the local Yellow Pages.

Going back to building a successful business these days, the alternative is to be high growth and low profit and eventually cash out in a sale to one of the big boys. Threaten them enough with disruption and then whisper into their ear that it’s better to head off a rival early with a manageable buyout than to face the loss of their entire business. Facebook did this to Instagram, paying a high price but preserving their business model. This is arguably easier to do in the fast-moving world of tech than in other industries.

Ultimately, is it a bad thing that so many businesses are now focused on the modest goals of profitability and sustainability? I’d argue no. For many people, there’s no need to grow big. Having fun, creating something, and being mildly profitable is surely enough to live a comfortable life.

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The Korean Hell

I read this morning an interesting article on the state of life for young people in South Korea. Man, was it depressing. In short, if you think your life is bad, you don’t even compare with what these kids have to go through. Here are some quotes:

Hwang often goes to work on a Monday morning with her suitcase, not leaving again until Thursday night. She eats at her office, takes a shower at her office, sleeps in bunk beds at her office. “If I finish work at 9 p.m., that’s a short day,” she said.

Paychecks come irregularly — or not at all, if the show gets axed — and because she doesn’t have a contract, Hwang wonders when she goes to sleep each night whether she’ll still have a job in the morning. She can make this life work only by living at home with her parents — when she goes home, that is.

“If you have enough money, South Korea is a great place to live. But if you don’t . . .” she trails off.

My old professor in business school once told me, “No one works harder than Americans. People always think it’s the Japanese, but no, it’s Americans. Koreans come close though.” In many respects, Korea is similar to America with cultural expectations about work and a paucity of days off. Just listen to how tough parents are with their kids:

Most frustrating of all, many young people say, is that their parents, who worked long hours to build the “Korean dream,” think the answer is just to put in more effort.

“My parents think I don’t try hard enough,” said Yeo Jung-hoon, 31, who used to work for an environmental nongovernmental organization but now runs a Facebook group called the “Union of Unskilled Workers.”

My book on happiness is still being written, but this focus on work at the expense of sanity and family is not sustainable. People are miserable! And the work doesn’t even pay that much either. What’s the solution to all of this? Read my book on wealth, start your own business, acquire a a large nest egg, and get the hell out of Korea.

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