Small Business Labs

Tim Berry's Baby Boomer Un-Retirement - Part 2

Several years ago (have I really been blogging that long?) I posted on Tim Berry's un-retirement.  Here is the main section of that post:

"I recently traded emails with well-known business planning expert and blogger Tim Berry.  I was curious how he found the time to do so much work.  His answer was he was retired.

This came as quite a surprise to me since from the outside it looks like he runs a media empire.  Tim has multiple blogs, a consulting practice and a software company.  He actively participates in webinars, writes books, speaks at conferences, writes for traditional media, etc.,etc., etc. 

While Tim may not be the typical baby boomer, he is a great example of our generation's approach to retirement.  Tim and others like him are why we are - somewhat obviously I think - forecasting that retiring boomers Will start and work in small businesses in growing numbers."

Tim has written a follow-up article on his un-retirement - How to Rewrite Your Job Instead of Retiring - over at Small Business Trends.  It is interesting to see his perspective after 3 years.  He is very enthusiastic about his retirement because he found something he loves doing.  Key quote:

"For me it was writing, blogging, speaking, etc. This blog posts, several blogs … in fact since I named the new CEO in April of 2007 I’ve done slightly more than 2,000 blog posts, and three books. And speaking, and teaching."

I think all boomers should read Tim's article as part of their retirement planning. 

The Atlantic Monthly on The End of Men

The Atlantic Monthly's The End of Men covers the trends showing that post-industrial society may be better suited for women than men.

This is not a new idea.  Academics and others across a variety of disciplines have been discussing related issues for many years.  Regular readers of Smallbizlabs may remember our post, The End of Men, which provides a small business perspective on these trends. 

Despite lots of coverage of this issue (the American Prospect's article It's Not the End of Men chronicles some of the more recent books and articles), most people are surprised when exposed to these trends. 

And having discussed these trends with a variety of audiences, I can report that many react negatively to the idea that women are not only catching up to men, but may overtake them on many economic measures over the next decade. 

I think in large part this is due to the long struggle for women's equality and the hurdles yet to be cleared.  The Atlantic article describes this as:

"In feminist circles, these social, political, and economic changes are always cast as a slow, arduous form of catch-up in a continuing struggle for female equality."

The recent Newsweek article -Are we There Yet? - covers some of the remaining hurdles for women. 

But as The End of Men points out: "Once you open your eyes to this possibility, the evidence is all around you."  We certainly agree. 

As with most Atlantic Monthly articles, The End of Men is very well written with lots of interesting insights and references.  It is well worth reading.

Also, Stephen Colbert's interview of the article's author is pretty amusing.

The Future of Museums - A Good Source of Trend Information

I just ran across the Center for the Future of Museums.  It is a research center run by the American Association of Museums.  Their focus is identifying and analyzing trends that will impact the future of museums.

The chart below is taken from their research on U.S. demographic trends and highlights the growing diversity of the U.S.  They also have a blog and a daily research round-up.

 
  

Since they are museum people, they know how to curate.  Both the blog and daily research round-up are excellent sources of trend information.   And while obviously museum oriented, the information is useful for other areas.

So if you are interested in future trends (and who isn't?), check it out.  You never know what you may learn.  For example, did you know there is a Dr. Pepper museum? 

What is The Singularity?

The Singularity is the view that at some point technology and humans will merge, making humans immortal - or at least capable of very, very long cognitive life spans. 

Our technology will be so advanced, we will be able cure diseases, stop aging and even upload our consciousness to machines.  Virtual worlds and reality will blend and be indistinguishable. 

The noted inventor, technologist and businessman Ray Kurzweil is the chief spokesperson for The Singularity Movement.  The recent New York Times article Merely Human, That's So Yesterday covers the movement and has a great quote from Kurzweil:

""We will transcend all of the limitations of our biology," says Raymond Kurzweil, the inventor and businessman who is the Singularity's most ubiquitous spokesman and boasts that he intends to live for hundreds of years and resurrect the dead, including his own father."

I hadn't heard about resurrecting the dead before, but I'm not surprised.  A lot of folks already think Kurzweil walks on water. 

In futurist circles, the view that humans and machines will merge has been around a long time.  It even has a name -  "post humanism."  Another term that comes up a lot is "human augmentation," which is the use of technology to add capabilities to humans.

While post humanism is still a ways off, human augmentation is here today and includes everything from memory enhancing drugs to artificial limbs to genetic engineering. 

The supporters of the Singularity movement believe we are surprising close to this utopian world.  Kurzweil, who really is one of the smartest people around, believes we will be there in 10 - 20 years.  

Since I have trouble uploading pictures to my computer, I find it hard to believe we will be able to upload human consciousness in that time frame.  But hey, who knows. 

Anyway, this is a fun topic and there is even a Singularity University.  And while the science fiction/semi-religious aspects of The Singularity Movement get all the press, Singularity University is focused on more practical applications of emerging technologies to solve pressing global problems. 

And we have plenty of problems that need solving.

MBO Partners: A Business Platform for Independent Consultants & Freelancers

As part of our broader research looking at freelance and contingent work, I interviewed Gene Zaino, CEO of MBO Partners, last week.  MBO Partners offers a service providing a legal and financial infrastructure for independent consultants and freelancers. 

Although not well known, MBO has assembled a large client base - they say they have over 15,000 independent consultants and freelancers using their service. 

Their infrastructure service includes (from their website):  "group health benefits, retirement programs, a business and medical expense reimbursement program, billing and invoicing, and more."

They provide these services, in part, by becoming the "portable employer of record" for their indenpendent consultant clients.  This means, legally, the consultants and freelancers work for MBO Partners. 

But this employment relationship is for administrative, legal and back office purposes only.  The independent consultants continue to run their own businesses as they see fit, and are fully responsible for almost all client-facing activities. 

Their service solves a number of business problems for the independent consultant:

1.  Since MBO Partners is the legal employer of the independent consultant, there is no compliance risk for clients.  With worker classification becoming an increasingly problematic issue for large corporations, this is a real benefit for independent consultants and companies they serve.

2.  They handle contracts, billing and collections.  This cuts down on the administrative time and effort required by the consultant.  MBO also has existing master agreements with several thousand client organizations.  These existing contracts can be used by all MBO consultants, making contracting easier.

3.  MBO Partners offers group health and other benefits.  And while the consultant has to pay extra for these, because they are group programs they will likely be cheaper than other options.

MBO Partners charges a flat rate of 5% of billings for their services.  The agreements are short-term and the independent consultant can opt out of their relationship with MBO at any time. 

I talked to an independent consultant who uses MBO Partners at last week's Freelance Camp.  He said they saved him a lot of administrative time and effort.  He also said his accountant estimated he broke even on their service before accounting for health care costs.  The estimated health care savings were $500 per month.  He was very pleased with MBO.   

MBO Partners is targeted at high value knowledge workers who want to remain independent, but are also looking for administrative support and access to benefits.  If you fit in this category, MBO is well worth taking a look at.

More Canadians Becoming Freelancers

Where the Jobs are Now from the Globe and Mail reports on Canadian government data showing that freelance, part-time and temp jobs are growing while full-time jobs continue to decline.  From the article:

"The jobs that are coming back are part-time and temporary. The latest data show that there is an ongoing loss of full-time and permanent jobs. By March, 2010, there were 47,800 more part-time jobs than when the recession began, but 300,000 full-time jobs were still missing."

Also increasing is self-employment:

"... self-employment has been on the rise. Over the past year, 34,500 Canadians went into business for themselves. Most were solo, though, unincorporated and without paid help."

Canada's recession was shallower than in the U.S.  They've also recovered more quickly.  A combination of a conservative financial sector (held in check in part by stronger financial regulations) and global demand for Canadian resources helped Canada avoid the worst of the recession.

But despite a stronger economy, Canada is being hit by the same broader trends that are leading to an increase in contingent workers in the U.S.  The shift towards freelancers, part-timers and other forms of contingent work are powerful and global.

The Rise of Super Angels

Several interesting articles this week on the growing role Angel Investors are playing in the funding of tech and Internet related start-ups.

Seed Deals Account for 26% of Early-stage Web Investments from Giga Om covers the frothy state of angle investments in web start-ups and the growing clout of "super angels."  These are folks who are experienced tech entrepreneurs or investors who look, act and behave in many ways like traditional VCs. 

But unlike traditional VCs, super angels actively invest in seed stage companies.  They also invest lower amounts of money than traditional VCs, between $25k-$250k. 

They generally invest in groups with other angels.  Some of these groups, like the famous Silicon Valley group The Band of Angels, are formal.  Others are informal groups that invest together as it makes sense.   

The article suggests - and we agree - that angels are disintermediating traditional VCs in many cases. 

But even though Giga Om describes the web start-up market "frothy," the Forbes article Calling All Angel Investors points out that relative to demand, very few start-ups are able to attract angel investment. 

The article uses as an example Pasadena Angels, an angel investment club that reviews 400-600 business plans a year.  Of those, roughly 20% are invited to present to the club, and only about 15% of those get funded.  If you do the math, this means roughly 97% of the companies submitting plans get turned down.

So while a lot of companies are getting funded, it is still is not easy to raise money from professional angel investors. 

What's Causing the Decline in Small Business Lending?

Small business lending is a big issue.  Many have noted the decline in lending during the recession and a number of policy efforts to stimulate lending to small businesses have been suggested or implemented. 

But it is unclear if a lack of credit is the primary reason for the decline in lending.   Some, like us at Smallbizlabs, believe that while a lack of credit availability is a problem, a lack of credit demand is the bigger problem. 

Simply put, we think most small business owners are not interested in adding debt (or expanding) until it is clear their business prospects are better. 

The Atlanta Federal Reserve Bank looked at this issue and recently released a paper showing that lack of demand is the primary cause for the lending slow down.  Key quote:

"Perhaps not surprisingly, outside of the troubled construction and real estate industries, close to half the firms polled (46 percent) do not believe there are any obstacles while only 9 percent report unwillingness on the part of banks."

Our research last year on small business credit mirrors these results.  We've also continued to hear from small businesses and banks that credit is available, if the borrowing firm is creditworthy. 

Having said that, because of the recession a lot of formally creditworthy small businesses aren't anymore.  Declines in sales and profitability are major problems. 

Credit standards are also tougher than during the credit bubble.  And they will remain so until we collectively forget that easy credit results in bubbles that end badly (historically, around 7-10 years). 

From our perspective, creating programs that attempt to stimulate loan demand will likely have limited impact at this point in time.  However, as the economy continues to recover we expect small business demand for credit to also pick up. 

We believe the small business economy is lagging the overall economy in recovering, and has just started to turn.  We expect to see stronger small business growth in the 2nd half of the year.  We also expect small business lending demand to grow in the 2nd half. 

If lending does not also grow in the 2nd half, then supply side solutions may be required.  But we think the money will be there as the economy recovers. 

What is Freelance Camp?

We attended Freelance Camp San Francisco over the weekend.  It's part of a broader Freelance Camp effort aimed at providing "accurate information and community support that empowers people to run a successful independent business."

Freelance Camp is modeled on BarCamps, which are open, participatory workshop-events.  Content is provided by participants and the day consists of sessions proposed by attendees with the schedule created on site the morning of the event.

Basically you show up, help pick the sessions and break into small groups and exchange information.  Space is generally limited and costs low.  Freelance Camp SF cost $30 and sold out.  There were about 80 attendees. 

Yes, it sounds chaotic.  But if the organizers do their job, these events are usually outstanding.  Kudos to NextSpace Coworking, who organized and hosted this camp.  They did a great job. 

We've attended a lot of camp events, and overall we like them better than traditional conferences.  They are highly interactive, leading to more opportunities to meet and interact with the other participants. And we are always impressed by the content.

In addition to exchanging information, there's also a social side to camps.  Like many of the camps, Freelance Camp SF had an after party, and an after, after party.   

There is a Chicago Freelance Camp planned for June 29th and Santa Cruz camp in October.  Visit the Freelance.org site for details.  You can also host your own Freelance Camp - click here for details. 

We'll post some of our learnings from Freelance Camp later this week.

Coworking Labs - Our New Research Blog for our Coworking Project

Emergent Research (that's us) is teaming up with the Society for New Communications Research for a research project on coworking.  We will be reporting on the project and coworking in general on our new CoworkingLabs project blog. 

We've been following the trends towards coworking and work "third places" for some time.  We first wrote about coworking in a research report in the Intuit Future of Small Business report The Changing Face of Entrepreneurship, which was released in January of 2007. 

Based on the growth of freelancers and the self-employed, the shift to mobile and distributed work and the increasing numbers of coworking facilities, we believe coworking may be at a tipping point.  Because of this, we think this is an excellent time to explore coworking in more depth.   

Our project plan is to:

1.  Develop a census of U.S. coworking facilities:  through secondary research, outreach to the coworking community, and partnering with others who are creating coworking directories we will create a census of coworking facilities.  Emergent Research has conducted an informal count of coworking facilities for the past two years.  This project stage will formalize this count, making it more accurate.

2.  Conduct two surveys augmented by in-person interviews.  The first will survey coworking facility owners and identify key facility statistics such as size of the facility, number of desks and offices, services offered, number and type of members, etc. 

The second will survey coworking facility users and will identify demographic and usage statistics such as user firm size, age of firm, number of employees, type of business, reasons for using coworking, etc. 

In-person and telephone interviews will be used to augment the survey research, dive deeper on topics of interest (the role of social media in coworking, for example) and develop case studies.   

We hope to finish the project in the late fall of this year.  We will be making our research findings public. 

So if you are interested in coworking, please drop by Coworking Labs.  We will, of course, continue to post on coworking on this blog.