Small Business Labs

The Flying Car Dream Continues

The first flying car prototypes were produced over a century ago.  And yet here we are, 100+ years later and still no flying cars.

But as the New York Times article What is a Flying Car points out, the long term dream of flying cars continues to get closer:

That dream, most experts agree, is a long way from reality. But the idea is gathering steam. Dozens of companies are now building these aircraft, and three recently agreed to go public in deals that value them as high as $6 billion. 

The New York Times likes writing about flying cars.  Just last November, they had another article on flying cars.  

Of course, flying cars have long been popular with the media. 

Our favorite example is Smithsonian Magazine's 1955 article predicting nuclear powered flying cars would be common by 2000.  What could possibly go wrong with lots of nuclear powered flying cars zipping around?

But as we said in our 2017 article Flying Cars May Finally Happen, non-nuclear flying cars may finally take off over the next decade.

But there's still a ways to go. As TechCrunch's The Air Taxi Market Prepares to Take Flight points out, "Electric air mobility is gaining elevation. But there’s going to be some turbulence ahead."

One of the companies covered in the NY Times articles is Kittyhawk.  Their aircraft is shown in the YouTube video below.

CB Insights Creator Economy Map and the Rise of Content Monetization

CB Insights is a technology analyst firm covering emerging technologies and tech startups.  They just released a creator economy market map, which is below (click to enlarge).

CB Insights points out that digital content creators have had to cobble together various tools to build and monetize their activities.  This is quickly changing.  Key quote:

"... a slew of startups are looking to disrupt the way creators make content, develop their audiences, or grow their businesses beyond advertising. Examples include video editing software Kapwing, personalized video app Cameo, and creator credit card startup Karat — companies spanning use cases like content creation, fan interaction monetization, and financing solutions."

We like their map's focus on content monetization, which we see as the biggest challenge for most digital content creation.

In addition to the map, CB Insights produced a spreadsheet with the funding details on about 150 venture backed creator economy startups.  It provides interesting insights on who is investing in what in terms of the creator economy.

The CB Insights map is similar to the creator economy market map released by the VC firm Antler, which we covered last week.  But both have insights the other doesn't have and both are interesting.  

BTW, CB Insights is an excellent source of information on technology and startups.  They also provide a lot of their information for free. 

So if you're interested in technology or startups, you should at least get their free newsletter.

The Swoosh Recovery Continues

Last year early in the recession, there was quite a debate about what shape the U.S. economy pandemic recovery would take. The two candidates that got the most support were a V-shaped recovery and a swoosh-shaped one.

A V-shaped recovery indicated a steep, but very short recession with a quick and robust recovery.

The swoosh-shaped recovery was named after the famous Nike logo. This shape indicates a steep decline followed by a gradual recovery.

As far back as last August it appeared the swoosh recovery was likely.  And the evidence now shows the swoosh is the winner.

The chart below (click to enlarge) is from the Oxford Economics Recovery Tracker, and shows the swoosh pattern.

The chart showing total U.S. non-farm employment *blow) is even more swoosh like.

It seems like one of the lessons from this recession is it's easier to shut down an economy than it is to restart it. 

But the good news is that the economy is clearly recovering.

Mapping the Creator Economy

The venture capital firm Antler recently released The Ultimate Guide to the Creator Economy.

The guide includes the map below (click to enlarge), which shows, by category, "the 220+ platforms that are empowering creators to make an income by doing what they love." 

We like their taxonomy, including their category descriptions:

• Audience curation: The platforms that are enabling creators to build foundational audiences. This allows creators to turn casual fans into super fans. 
• Audience monetization: The platforms that support creators to monetize their audience once they have a following.
• Vertical platforms: The platforms that are niche but potentially mega players. They focus on one vertical area for the creator, such as Fitness or Gaming.
• Community management: The platforms that supports creators to own their audience. 
• Creator tools: These are tools that creators can use to build and grow their businesses.

Each of these areas is described in much more detail, including examples, in the Antler article.  It's well worth reading if you're interested in the creator economy.

Online Platforms Supporting Digital Nomads

Platform Professional's Platforms and Digital Nomads covers online platforms supporting digital nomads. Key quote:

"Platforms may not have created the phenomenon of the digital nomad, but they are making it easier to become one."

The article focuses on the challenges digital nomads face and how platforms help digital nomads overcome them. These include:

• Finding places to stay
• Finding and managing remote work
• Finding unique and exciting travel and cultural experiences
• Avoiding loneliness and finding community

Despite its title, their chart below (click to enlarge) shows 11 platforms that provide services that help digital nomads.

Another interesting article on digital nomads is Work and Wander: What Today’s Digital Nomads Signal for the Future of Travel, from Adventure Travel News. 

It's targeted at the travel industry and how it can better support the needs of digital nomads.  Key quote:

Although digital nomads may not be a traditional target market for adventure businesses, their very nature makes them adventure travelers. This group wants to truly experience a destination by staying for an extended period of time. Their ability to work from anywhere means they are also generating income while they travel. Therefore, attracting digital nomads is one way destinations, accommodations, and activities can support their recovery.

Our first reaction when COVID-19 hit was it would greatly reduce the number of digital nomad.  Instead, their numbers skyrocketed.  

And while we don't expect the growth rate in the number of digital nomads in 2021 to be nearly as strong as 2020, we expect the number of digital nomads to continue to increase over the next 2-3 years.

What are Gigfluencers?

Influencer marketing has become a popular way for companies to promote their brands.  According to Influencer Marketing Hub, brands are expected to spend $13.8 billion on influencer marketing programs in 2021.

As their chart below shows (click to enlarge), influencer marketing spend has been rapidly increasing.

Of course, you can't have influencer marketing programs without influencers.  

These are people who have an online audience that they monetize by getting paid to promote products and services.  

And, according to a recent study by the influencer platform ShopStyle Collective, the pandemic created a new group of influencers they're calling gigfluencers.

Key quote from a Rakutan's Meet the “Gigfluencer,” a new generation of influencer for the work-from-anywhere era:

According to ShopStyle, a Gigfluencer is a U.S.-based influencer — often focused on the retail category (apparel, footwear, beauty and sportswear) — who began monetizing their content for the first time (or re-attempted to monetize their content) around the start of the COVID-19 pandemic lockdown. True to their name, Gigfluencers are more likely to be monetizing their content as a side gig or “side hustle” during the pandemic, viewing their content creation work as a source of supplemental, non-primary income.

We've long covered the growth of side gigs and the growth of low friction, highly flexible supplemental work options - and the rise of gigfluencers is another example.

One-Third of Businesses Surveyed Plan to Increase Their Use of Nonemployee Labor Over the Next 18-24 Months

Deloitte and the MIT Sloan Management Review recently released Workforce Ecosystems: A New Strategic Approach to the Future of Work.   

This research study found that most executives and managers today "consider employees and other workers who create value for the enterprise — including contractors, service providers, gig workers, and even software bots — to be part of their workforce."

They also found about 1/3rd (34%) of the firms surveyed plan to increase their use of external nonemployee labor (freelancers, etc.) over the next 18-24 months.

An interesting study finding is that small businesses are more likely to say they plan on increasing their use of non-employee labor than large corporations.

The chart below uses data from an interactive tool provided as part of the Workforce Ecosystem study.

While interesting, it's not surprising. The use of nonemployee contract labor by SMBs has been rapidly growing for over a decade.

SMBs tend to be more flexible and less bureaucratic around the use of nonemployee labor than bigger corporations.  And so while both large and small firms have been increasing their use of nonemployee labor, SMBs have been doing so at a faster rate.

We expect this trend to continue.

The Long Term Shift to Contract Labor by Small Businesses

Data from the IRS shows that sole proprietor small businesses spent $69.2 billion on contract labor in 2018 (the most recent data available).  Contract labor refers to nonemployee labor, such as freelancers, gig workers, etc.

This is up from $64.8 billion in 2017 and just $34.4 billion in 2010. Over the period from 2010 to 2018, contract labor spend by sole proprietors increased by an annual growth rate of 9.1%.

Spending on salaries and wages grew from $73.7 billion in 2010 to $97.9 billion in 2018, or an annual growth rate of 3.61%.

In other words, spending on contract labor increased at 2.5x the spending on traditional employee salaries and wages from 2010 to 2018.

In 2003, contract labor was about 20% of total labor costs of sole proprietors. By 2010 it had risen to 31%, and in 2018 it reached 41%.

We expect the trend towards contract labor use by small businesses to continue.

Club Med's Top Places for Digital Nomads

The global resort company Club Med recently released a report covering the top countries and places for digital nomads.  

They ranked countries and places by constructing an index based on cost of living, safety, average internet speed, presence of nature and wellness spots, and the number of both relaxing and adventurous activities in each country.

The chart below (click to enlarge) lists their 20 top places, and most will be familiar to digital nomads (we've been to 13 of the 20).  

Thailand was ranked as the top country, with Phuket the #1 place and Krabi the 3rd ranked place.  Although it didn't make the top 20, the hill country city of Chang Mai is another popular Thai digital nomad location.

The report focused on tropical locations, so popular digital nomad places like Berlin and Amsterdam aren't included.  

See the report for more details and descriptions of the top countries and places.

The shift to remote work has untethered workers from their offices.  And many are taking advantage of their newfound freedom and becoming digital nomads.

After the strong growth in the number of digital nomads in 2020, we expect another uptick in their numbers in 2021. 

See our Digital Nomad section for more on this topic.

The Pandemic Increased Interest in Self-Employment

Forerunner Ventures' The universal holding pattern: a period of trial followed by an era of opportunity covers survey work they've done on the impact of the pandemic on consumers.

One of their main findings is the desire for empowerment and independence has increased.  Key quote:

The pandemic offered a taste of independence with remote work for some and a desire to have control over one’s own destiny in a fractured economy for others, making self-employment an increasingly attractive option.

As Forerunner's chart below (click to enlarge) shows, a substantial portion of Americans - and especially those with kids at home - are more interested in working for themselves.

The main reason Forerunner's survey found for the growing interest in self-employment is flexibility.  Again from the article:

"Of the group that wanted to try self-employment, 59% of people said flexibility was the primary factor ... There’s empowerment in self-employment and the independence that comes from owning your own time, traveling when desired, and balancing work and private life ..."

This, of course, is no surprise. 

Flexibility, autonomy and control have long been known as the key reasons people choose to be self-employed.

There's mounting evidence that self-employment in surging in the U.S., and this survey adds to the evidence.

Led by Retail, The Surge in New Business Applications Continues

The new business application surge, which started last summer, continued in April, with about 488,000 applications submitted.  

This data comes from the U.S. Census' Business Formation Statistics and based on IRS Employment Identification Numbers (EIN) applications.  

Most of the applications are what the Census calls "applications other than high propensity" (grey in the chart; click to enlarge).  These are applications from businesses that are unlikely to have employees, such as freelancers, independent contractors and other types of solopreneurs.

The industry with the highest number of applications in April was retail trade, with 96,000 applications.  This is a bit more than twice the rate of retail trade business applications prior to COVID-19.

In addition to the surge, both charts also illustrates the longer-term shift away from shift employer business applications (high propensity applications, in yellow) and towards applications from solopreneurs.

Back in 2003-2007 80% of new retail trade business applications came from firms planning on hiring traditional employees.  In April, only 33% did.  

This same shift to solopreneur firm applications is occurring in most industries.  For example, the shift is even more pronounced in professional services than it is in retail.

At this point it's clear the surge in applications is real. 

But more work needs to be done to understand who the new applicants are, what their plans are, and how many will actually form new small businesses.

Who are "Geriatric Millennials"

Over the past week, there's been a flurry of articles and social media posts on "geriatric millennials".

This term refers to the oldest millennials, those born between 1980 and 1985.  

One of the more popular articles is Today's Are you a 'geriatric millennial'? The new term defining a micro-generation.  Key quote:

It's always been a bit confusing to figure out when Generation X ends and the millennial generation begins — and now a new cohort has emerged between the two groups that has folks in their mid-to-late 30s feeling, well, old.

If you were born in the early 1980s, congratulations! You are now considered a geriatric millennial.

Our favorite article on this topic is Level's satirical 7 Most Telltale Signs That You Are a ‘Geriatric Millennial,’ Ranked.  The picture below is from the article.

Over the past 3-4 years we've found that older millennials are increasingly responding to survey and interview questions in similar ways as their Gen X brothers and sisters.  

Life stage matters and the oldest millennials are now well into middle age.  Because of this, many of their views are evolving.  

The Creator Economy Monetization Features of the Major Social Media Platforms

Axios' Tech giants have all become creator companies covers the various ways digital creators can earn money on a variety of tech platforms, 

Their excellent summary chart is below (click to enlarge).

The article also makes a good point about the diversity of digital creators. Key quote:

Substack creators are writers, while Twitch creators make videos. LinkedIn shares subscription revenue with online course instructors, while YouTube shares ad revenue with everyone from beauty professionals to workout instructors.

It seems almost every day, there's a new announcement around making money as a digital creator. 

For example, as we were writing this article, we heard that YouTube is launching a $100 million fund to attract TikTok creators to its Shorts product.

Since a key issue facing the creator economy is the vast majority of digital creators make very little money, the growing number of monetization options is good news.

The 5 Ways the Creator Economy Rhymes With the Gig Economy

Despite being widely attributed to Mark Twain, there's no evidence he said: "history doesn't repeat itself, but it often rhymes." But it sure sounds like him.

And, in our opinion, this aphorism nicely describes how the recent surge of excitement about the creator economy "rhymes" with what happened with the sharing and gig economies back in 2012-2015.

Here are the key ways we see them rhyming:

1. The Dream

Both the creator economy and the gig economy are based on "the dream".

In the case of the gig economy, it's the entrepreneurial dream of being self-employed and having the flexibility, freedom, and ability to pursue a passion that comes with it.

The creator economy shares the entrepreneurial dream but adds the potential of the fame, glory, and vast riches that come with being a highly successful artist/creator.

2. The Role of Platforms

The initial excitement around the gig economy happened in part because of the rise of platforms, specifically Uber, Task Rabbit, and Airbnb. These platforms claimed they made entrepreneurship easy, including providing decent pay, flexible work, and the ability to be your own boss.

The creator economy platforms like YouTube, TikTok, and Instagram have made it possible for anyone to be a star and make lots of money. More recently, a new wave of platforms, like Substack, Patreon, and others, provides new ways to monetize being a creator.

And like the gig platforms in 2012-2015, the creator economy platforms are generating and getting lots of hype and media coverage.

3. Changing the world

Much of what we now call the gig economy used to be called the sharing economy. And according to its adherents, sharing/gig work would change the world by decentralizing economic power, democratizing and globalizing economic opportunity, and enabling more people to be entrepreneurs.

Creator economy adherents say similar things and add that the creator economy will change things by allowing more artists to earn a decent living.

4. Reality versus hype

The initial hype and excitement about the sharing and gig economies have worn off to a large degree.

And cracks are already forming around the creator economy. There are discussions about creator burnout, the stresses and challenges of being self-employed, the control exerted by the platforms, and how difficult it is for most creators to earn a living.

Expect the hype around the creator economy to wear off in a few years (or sooner) as it did for the sharing and gig economies.  

5. The Yin and Yang of independent work

Most creators are independent workers. Because of this, they share what we've long called the yin and yang of independent work.

Independents like the autonomy, freedom and control independent work provides. They also like that it lets them pursue their passions and work in a manner that reflects their values.

But in n exchange, independent workers have to deal with the stress, hard work, and financial uncertainty that comes with independence.

Despite these downsides, research consistently shows that most independent workers prefer being independent over having a traditional job.

We recently completed some research on digital creators and, not surprisingly, it shows they too face the Yin and Yang - and, like independent workers, most prefer being independent.

We'll have more on this research in the future.

U.S. Birthrate Hits Another All-Time Low

One of the interesting statistics from the 2010 U.S. Census was their finding that the U.S. birthrate hit an all-time low in 2010.  

At the time, demographers tended to blame this on the great recession and many forecast birthrates would increase as the economy got stronger.

But fertility rates didn't improve. 

In fact, they got worse and steadily declined from the all-time low of 1.72 in 2010 to a new all-time low of 1.64 in 2020.  

Key quote from the Washington Post's U.S. birthrate falls to its lowest level in decades in wake of pandemic:

Before the pandemic, American women were already having fewer children, doing it later in life or choosing to not have children at all. The newly released data indicated a sharpening of that trend. The U.S. birthrate fell across races, ethnicity and almost all age groups.

Falling birthrates also, obviously, means fewer births.

The chart below, from Bloomberg's U.S. Births Drop to the Lowest Level Since the 1970s, shows the impact on births from the last decade's declining birthrate.

Declining fertility and birth rates have enormous social and economic implications.

They lead to reduced economic growth, make it harder to pay for social programs (especially social security and Medicare) and cause economic dislocations due to changing demand patterns.

On the plus side, they lead to more people buying pets.

We have more on these topics in our Demographics and Pet Trends sections.  

The Problems Fashion Freelancers Face

Most gig economy and freelance studies cover a broad range of independent workers, so it's interesting when someone does a segmented, vertical market study on a freelancers.  

Vogue's Fashion's freelancer problem exposed covers a recent survey on the effects of the pandemic on fashion industry freelancers'.  

The survey results show that the pandemic had a strong negative impact on them, with 66% of fashion freelancers reporting their financial situation has been unstable during the pandemic, compared to 19 percent before the pandemic. 

Also, 76% of the respondents reported their financial situation has negatively impacted their mental health.

The Vogue chart (click to enlarge) below shows the impact by issue.

These results are similar but more negative than the 2020 MBO Partners State of Independence study results, which found 61% of independent workers said that COVID-19 set them back financially.

The article also cited other problems that fashion freelancers face. Key quote:

Among the reasons cited by respondents were: fewer freelance opportunities, lack of contract clarity, poor pay, lack of supplemental jobs, uncertainty with clients and late payments. The most common issues included the irregularity of work, extreme pressure and stress, clients canceling jobs with no notice or compensation, and ageism.

So one may ask, why do they do it?

The article explains why:

Giulia Mensitieri is an anthropologist and author of The Most Beautiful Job in the World, which exposed a culture of exploitation across the industry. She says that fashion is upheld by the illusion of "the dream": if you can first endure hardships and free labour, you'll be awarded on the other side by a glamorous role.

What is Ultra Wideband?

Apple recently announced AirTags, which they describe as:

AirTag is a supereasy way to keep track of your stuff. Attach one to your keys, slip another in your backpack. And just like that, they’re on your radar in the Find My app, where you can also track down your Apple devices and keep up with friends and family.

These use a wireless communications technology called ultra wideband, or UWB.  

Like Bluetooth and Wi-Fi, ultra-wideband is a short-range, wireless communication protocol.

But unlike its Bluetooth and Wi-Fi, it operates at very high frequencies and can be used to  very quickly (nanoseconds) capture highly accurate spatial and directional data.

The way it works is once UWB enabled objects are near each other, they start "ranging" - sending short pulses (two nanoseconds) back and forth between each object. 

This pulsing provides highly accurate tracking information, including motion and relative position, including height (z-axis).  

So you can think of UWB as a very accurate (within 1/2 inch) short-range GPS that works both indoors and outside.

CNET's Apple AirTags rely on UWB. Here's how ultra wideband will make your life easier covers a range of potential future applications, so we won't bother repeating their work. 

But it's clear UWB could enable a wide range of new and interesting consumer and business applications and services. 

But one application they didn't cover is UWB provides the speed, accuracy and motion detection capabilities to enable doors to open and close like they do in Star Trek. 

We wouldn't consider that a world changing application, but it would be fun.

The Post Pandemic YOLO Movement

YOLO is an acronym for "you only live once", which was popularized by the rapper Drake a decade ago.

We learned this interesting fact from the New York Times article Welcome to the YOLO Economy.  

The article describes the growing number of people who are, in the words of the article, "quitting prestigious and high-paying jobs to pursue risky passion projects."

Key quote from the article:

Several people in their late 20s and early 30s — mostly those who went to good schools, work in high-prestige industries and would never be classified as “essential workers” — told me that the pandemic had destroyed their faith in the traditional white-collar career path. They had watched their independent-minded peers getting rich by joining start-ups or gambling on cryptocurrencies. Meanwhile, their bosses were drowning them in mundane work, or trying to automate their jobs, and were generally failing to support them during one of the hardest years of their lives.

And because they've lost faith in the traditional career path, they've decided to strike out on their own in some way.  

There is a growing body of evidence indicating that the number of independent workers (freelancers, self-employed, gig workers, etc.) has increased substantially since last fall.  

Among the examples, most of which are anecdotal, is the surge in new business applications by solopreneurs.

The pandemic clearly has many people re-evaluating their lives. 

And while we don't think the vast majority of traditional jobholders will leave them for self-employment, it's becoming clear many are.

We'll have more on surge in self-employment in the near future.

Post Pandemic, the Hybrid In-Office, Remote Work Model is the Most Favored

By late last summer, it became clear that most companies would likely move to a hybrid working model, which combines increased levels of remote work with in-office work.

The Washington Post's recent article The hybrid office is here to stay. The shift could be more disruptive than the move to all-remote work covers the growing number of companies announcing they're going hybrid.  Key quote:

"The post-vaccine workplace is taking shape, and for many it’s going to be a hybrid model, allowing more remote work but with clear expectations that some days a week will be in the office."

The reason hybrid work is winning is surveys consistently show most workers and their bosses think hybrid is the best way to go.

For example, PWC's study It’s time to reimagine where and how work will get done found that "less than one in five executives say they want to return to the office as it was pre-pandemic."

As the study chart below shows, most executives think employees need to be in the office between 2-4 days.

The PWC study also found that most employees think they should be in the office 2-3 days.

Not surprisingly, most companies agree and say when they return they expect their employees to be in the office 3 days a week.

The Washington Post article's title mentions that this shift will be disruptive.  But the focus of the article is on it being disruptive for companies.

The shift to hybrid work models will also have major economic and societal impacts due to dislocations caused by changing commuter patterns and shifts in where people choose to live.

And we're just beginning to understand what these 2nd order impacts are and what they will mean.  

The Rising Net Worth of the Less Affluent

Bloomberg's The Comeback of the Bottom Half covers Federal Reserve data showing that the less-affluent 50% of Americans saw their net worth rise the fastest over the past decade.

Key quote:

The rich had a great run, but they didn’t even come close to the percentage gains in real wealth seen by the bottom 50%. These amounted to 21.9% over the past year, 125.6% over five years and 526.2% over 10 years, compared with the one-percenters’ 10.3%, 33.8% and 83.9%.

The article chart below shows the dramatic increase in the bottom 50%'s wealth since the Great Recession.

While very good news, the article points out there is still long way to go.  The strong decade of growth only gets the lower 50%'s share of household wealth back to about half of where it was in 1992.

The rise in wealth for the lower 50% over the past decade is certainly good news and, hopefully, it will continue.

We're Nearing Peak Fossil Fuel Demand

McKinsey's Global Energy Perspective 2021 suggests the global demand for fossil fuels will peak in 2027 and steadily fall afterwards.  

As McKinsey's report chart below shows (click to enlarge), global coal demand peaked in 2014 and they are projecting oil demand to peak in 2029, and natural gas demand peaking in 2037.

Other forecasts are even more aggressive.  A recent report by the International Energy Agency suggests oil supply and gasoline demand may have already peaked.  Key quote from their report:

 "Gasoline demand is unlikely to return to 2019 levels, as efficiency gains and the shift to electric vehicles eclipse robust mobility growth in the developing world." 

The drivers of these changes, of course, are the steady declines in the cost of renewable energy sources and their increased use.

As forecasters we're fascinated that the term "peak oil" now refers to the point in time when global oil demand begins to fall.

It wasn't that long ago when "peak oil" was used to describe the point in time when oil supplies started running out. 

There were even a bunch of forecasts in the 2000's suggesting a lack of oil would lead to the collapse of modern civilization, with many suggesting the collapse would happen by 2020 - or even earlier.  

Instead of running out of oil, it's now likely vast amounts will end up staying in the ground.  

The last issue keeping renewables from fully replacing fossil fuels is storage.  But that's quickly changing.

Large battery storage systems are coming down in price and "green hydrogen" systems are becoming viable.  

So expect to see the declines in the use of fossil fuels continue - and maybe fall even faster than McKinsey estimates.  

The Legal and Tax Complications Faced by Digital Nomads and Their Employers

Thanks to the pandemic, employers and employees have both embraced the advantages of remote work. 

Even IBM, which got a lot of attention several years ago when it ended its remote work programs, is now embracing remote work.

But the surge in remote work has spotlighted a potential set of problems for both remote workers and their employers. 

It turns out that U.S. labor and tax laws are not designed for, or very accommodating to, remote work.  

Recode's Did you work remotely last year? A surprise tax might be waiting for you nicely covers the various tax issues workers face when they live work remotely. 

A quick summary of the article is if you're working remotely, it can be pretty complicated and potentially expensive from a tax perspective.

But remote work is even more legally challenging for employers.

The large corporate labor and employment law firm Littler recently released its first Global Transformation Initiative report (warning - it's long and written by lawyers for lawyers).  

The report covers the various ways "wandering workers" - Littler's term for remote workers - can get their employers into legal trouble. 

Key quote from the report's landing page:

The Wandering Worker phenomenon raises a host of employment considerations:

• Recruiting, hiring, onboarding, managing, and firing employees is going virtual.
• Employment taxes and withholding become increasingly complex when the employer and Wandering Worker do not work in the same location.
• Determining which state and local benefits apply is particularly tricky.
• Employers are struggling to implement systems for tracking and compensating working and travel time for non-exempt employees, among other wage and hour concerns.
• Privacy and data security issues emerge, particularly as the trend towards global workforces accelerates.
• Union organizing is rapidly adapting to the new work regime.

In all these areas, there are potential legal landmines remote workers could easily trigger that would create legal problems for their employer.

Our work with MBO Partners has found that the number of digital nomads substantially grew in 2020 as more workers found themselves untethered from the office due to the pandemic.

As the MBO Partners report chart below shows, this growth was mostly driven by digital nomads with traditional jobs.  

We expect these numbers to grow again in 2021.  

As Littler points out, digital nomads expose their employers to tax and legal risk, with traditional employee digital nomads being much riskier for their employer than digital nomads who are independent workers.  

But all digital nomads and those employing them need to be aware of these issues.  

JungleScout's State of the Amazon Seller

JungleScout provides a platform that helps small businesses find, launch, and sell products on Amazon.  They recently released their 2021 State of the Amazon Seller Report.

This report covers who Amazon's small business sellers are, what and how they’re selling, how they are responding to the pandemic induced increase in ecommerce and their future plans.

Amazon has about 2.4 million active global sellers on their platform and they generate roughly $208 billion in revenue, which is about 54% of Amazon's total revenue.  Of the 2.4 million sellers, almost half (49%) are based in the U.S.

And according to the report, most sellers (73%) are solopreneurs.  Only 27% report having one or more traditional employees.  

Also interesting is 36% of sellers report having a full-time job in addition to their Amazon activities.  In other words, over one-third of small business sellers selling on Amazon are side giggers.

Over half of the sellers report selling their goods on other platforms (eBay, Etsy, etc.), in stores, or on their own ecommerce site.

We found the data on how they plan to expand quite interesting.  

As the report chart below shows, Walmart is the top platform they plan to expand to.

   

Roughly 1 in 5 (21%) also reported they plan to start their own ecommerce site.  

Having a proprietary ecommerce site and not being beholden to the large platform companies is an increasingly popular option.  

This is one reason why Shopify has become so successful.

Shopify gives merchants access to services such as payments and fulfillment, but lets them maintain more control of their branding and customer relationships.  Shopify's fees are also generally lower than Amazon's.

Having your own site is too valuable not to do it - if you can make it work.  And increasingly, small businesses are making it work.

The Demographics of Nonemployer Business Owners

The U.S. Census has released new demographic data on nonemployer businesses.  

Nonemployers are businesses that have an owner but don't have paid traditional full or part-time employees (W2 employees). The data comes from tax records, and you can think of nonemployers as solopreneur businesses (freelancers, independent contractors. gig workers, etc.)

The new data provides information by owner demographics such as sex, race, ethnicity and veteran status, geography, industry, receipt size class, and legal form of organization.

The Census chart below (click to enlarge) illustrates some of the demographics of nonemployers for 2017.  Census is planning on updating this for 2018 (the most recent year the non-demographic data is available) in the near future.

The nonemployer dataset gets less attention than other government data on self-employment. There have been two reasons for this.

The first is until fairly recently, there was little interest in self-employment data.  The rise of the gig economy has changed this.

And second, the nonemployer dataset is messy and includes a hodgepodge of business entities - passive businesses, firms no longer in business, LLCs owned by major corporations, etc. - that aren't active solopreneur businesses. 

But despite these issues, we find the nonemployer data to be a useful indicator of the overall size and growth - and now, also the demographics - of U.S. self-employment.  

Because this dataset is getting more attention, the Census is working to make it more complete and timely.  The addition of demographic data is an example of these efforts. 

Recode's 10 ways office work will never be the same

At around 4,000 words, Recode's 10 ways office work will never be the same is really more of a report than an article.

The article is chocked full of data and links to interesting studies illustrating what offices will be like post-pandemic. 

The 10 ways office work is changing covered in the article are:

1. Working from home is here to stay
2. Flexibility is a double-edged sword
3. Some populations will benefit from working from home while others struggle
4. The office will still exist, but you’ll use it differently
5. Expect more AI, automation, and freelancers
6. Our communication will be more asynchronous
7. How our productivity is measured will change
8. Culture will be harder to create
9. We’re more human at work
10. More of your colleagues will live somewhere else

Two of 10 jumped out at us. 

#3, some benefiting from remote work while others struggle is something we see all the time in our work.  Hopefully hybrid models will fix this for many who struggle.

#7,We've long thought our standard productivity measures don't capture knowledge work properly.  The shift to hybrid models will likely lead to new, more effective measures.

If an analyst or consulting firm produced this report, it would cost thousands of dollars.  It also wouldn't be as well written.  

Since Recode is free, we recommend that anyone interested in the topics above read the article.