Trend Following: The Start Up of You

Tom Friedman writes:

The rise in the unemployment rate last month to 9.2 percent has Democrats and Republicans reliably falling back on their respective cure-alls. It is evidence for liberals that we need more stimulus and for conservatives that we need more tax cuts to increase demand. I am sure there is truth in both, but I do not believe they are the whole story. I think something else, something new — something that will require our kids not so much to find their next job as to invent their next job — is also influencing today’s job market more than people realize.

Look at the news these days from the most dynamic sector of the U.S. economy — Silicon Valley. Facebook is now valued near $100 billion, Twitter at $8 billion, Groupon at $30 billion, Zynga at $20 billion and LinkedIn at $8 billion. These are the fastest-growing Internet/social networking companies in the world, and here’s what’s scary: You could easily fit all their employees together into the 20,000 seats in Madison Square Garden, and still have room for grandma. They just don’t employ a lot of people, relative to their valuations, and while they’re all hiring today, they are largely looking for talented engineers.

Indeed, what is most striking when you talk to employers today is how many of them have used the pressure of the recession to become even more productive by deploying more automation technologies, software, outsourcing, robotics — anything they can use to make better products with reduced head count and health care and pension liabilities. That is not going to change. And while many of them are hiring, they are increasingly picky. They are all looking for the same kind of people — people who not only have the critical thinking skills to do the value-adding jobs that technology can’t, but also people who can invent, adapt and reinvent their jobs every day, in a market that changes faster than ever.

Today’s college grads need to be aware that the rising trend in Silicon Valley is to evaluate employees every quarter, not annually. Because the merger of globalization and the I.T. revolution means new products are being phased in and out so fast that companies cannot afford to wait until the end of the year to figure out whether a team leader is doing a good job.

Whatever you may be thinking when you apply for a job today, you can be sure the employer is asking this: Can this person add value every hour, every day — more than a worker in India, a robot or a computer? Can he or she help my company adapt by not only doing the job today but also reinventing the job for tomorrow? And can he or she adapt with all the change, so my company can adapt and export more into the fastest-growing global markets? In today’s hyperconnected world, more and more companies cannot and will not hire people who don’t fulfill those criteria.

But you would never know that from listening to the debate in Washington, where some Democrats still tend to talk about job creation as if it’s the 1960s and some Republicans as if it’s the 1980s. But this is not your parents’ job market.

This is precisely why LinkedIn’s founder, Reid Garrett Hoffman, one of the premier starter-uppers in Silicon Valley — besides co-founding LinkedIn, he is on the board of Zynga, was an early investor in Facebook and sits on the board of Mozilla — has a book coming out after New Year called “The Start-Up of You,” co-authored with Ben Casnocha. Its subtitle could easily be: “Hey, recent graduates! Hey, 35-year-old midcareer professional! Here’s how you build your career today.”

Hoffman argues that professionals need an entirely new mind-set and skill set to compete. “The old paradigm of climb up a stable career ladder is dead and gone,” he said to me. “No career is a sure thing anymore. The uncertain, rapidly changing conditions in which entrepreneurs start companies is what it’s now like for all of us fashioning a career. Therefore you should approach career strategy the same way an entrepreneur approaches starting a business.”

To begin with, Hoffman says, that means ditching a grand life plan. Entrepreneurs don’t write a 100-page business plan and execute it one time; they’re always experimenting and adapting based on what they learn.

It also means using your network to pull in information and intelligence about where the growth opportunities are — and then investing in yourself to build skills that will allow you to take advantage of those opportunities. Hoffman adds: “You can’t just say, ‘I have a college degree, I have a right to a job, now someone else should figure out how to hire and train me.’ ” You have to know which industries are working and what is happening inside them and then “find a way to add value in a way no one else can. For entrepreneurs it’s differentiate or die — that now goes for all of us.”

Finally, you have to strengthen the muscles of resilience. “You may have seen the news that [the] online radio service Pandora went public the other week,” Hoffman said. “What’s lesser known is that in the early days [the founder] pitched his idea more than 300 times to V.C.’s with no luck.”

Least overhead of all start-ups to pursue? Trading.

Our firm can help.

Hat tip to Jim Byers for the article lead.

11 thoughts on “Trend Following: The Start Up of You

  1. Cool, basically the article says employers are looking to hire Bill Gates for 30k a year and demand they invent Windows every quarter or else get fired. Man I want that too! Isn’t that supposed to be the own enterpreneurs task? Good luck, not gonna happen, the best will not work or invent something for you without a true partnership.

  2. Interesting article and I see where he’s coming from but I also tend to agree with Jim Rogers in that there will come a point where people need to get back to skills which involve creating, manufacturing and producing goods. Farming, manufacturing etc etc

  3. I see the article as basically saying your father’s job is gone…get on with it. Hard to find something negative there.

  4. It is quite valid to compare Trading with Internet startups – both are terribly competitive and have a 90%+ failure rate. Can you be successful in either endeavor? Of course you can, but the odds are against you and always remember that someone has to get the short end of the stick!

  5. The idea that everyone can be a successful trader is the biggest “Holy Grail” out there!

  6. Armando – you miss the point.

    If you start everything with you will not “make it” then nothing is worth trying because failure rates are high. As you know Edison tried 1000 times to invent the bulb – extremely low successful rate – but he kept trying and at one point that cummulative knowledge created a positive effect.

    Everything on life is the same – high failure rate – this is a probabilitiies world- but I can assure you that if you have the passion and persistance – you can achieve anything you want. Does this means that you will achieve things in a week or a year – no – some stuff takes longer and thats why is worth trying.

  7. You can’t have real success without some “serial failure”. There is nothing wrong with failure as long as you learn and improve upon it each time.

    If you are afraid to fail you will never succeed… at anything… you won’t even fail successfully 🙂

  8. Armando, in the end you die. That is a 100% success rate. Everyone gets to do it at least once. You do not even have to try. It will happen.

  9. If you do not try you get to have a job of some kind where you can earn enough to pay the bills, and in the end you might have enough to retire on. Then again, maybe not. Probabilities are what count. Some years ago I read some stats about new business start ups, 90% failed within 5 years. But of the 90% failures 50% were restaurants. I guess old Henry Ford said it best. If you think you can or you think you can’t…. you’re right.

  10. Look at the companies Friedman is talking about-Social media as a business model is just wall street blowing internet bubble 2.0!

  11. For decades governments refused to let North American steel mills die in an attempt to preserve jobs.

    The unnintended consequence of that was to grossly increase North American steel costs and open the door for China to dominate by far the world steel markets with overall better quality and lower prices.

    Finally, North American steel companies have had to face the facts…they’ve trimmed down and a mill that used to employ 1200 can now be run with 30.

    Like any bailout, artificially preserving the status quo makes us weak, bloated and filled with a sense of entitlement with no basis in reality.

    And companies, countries, traders, and business people without a basis in reality eventually go broke…see, for example GM, Greece, Julian Robertson, and Ken Lay…in that order.

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