ab Work Life, Virtual Startups PVT
- Part of series SPECS4US - Specs4US All - Series and Guide
At-Scale-Benefits for Gig Economy Workers
Gig Economy "Alternative Work Arrangement" jobs rose from 10% 2005 to 16% in 2015.
Allow Flexible better Free-Market Match e.g. Uber 24x7
Digital platforms better match workers with jobs (a.k.a. gigs). Uber was, and is, the prototype of this upheaval.
Vast gig economy workers have no benefits or health insurance.
The companies he [Uber/Lyft driver] drove for paid him less and revised their bonus programs. His expenses stayed the same, but the hours he worked were inconsistent, at best. Joseph had no health insurance, no workers’ compensation and no unemployment insurance. If he got hurt while driving, he would likely wind up in the emergency room, on the public’s dime. [As Uber/Lyft execs minted billions on IPOs, their drivers] working the same 60-hour week, Joseph estimated he was earning less than $1,000 a week. That’s just slightly more than the minimum wage of $15 an hour in California.- Washington Post
Boost Margins by shifting costs to Public.
Using a contract workforce, enables disruptive companies to skirt labor laws, exploit working people and leave taxpayers holding the bag.
AB-payrolling - boosted by AB5
Anti-Gig worker Laws
AB5 passed 9/10/2019. In CA, more than 4 million Californians are part- or full-time "gig" workers. Typically, they are not paid a minimum wage or overtime. They don’t have employer-provided health insurance. They do not earn workers’ compensation, unemployment insurance or paid sick days. And without the employer contribution to Social Security and Medicare, these workers represent a ticking time bomb that will make California’s unfunded public pensions look like a small problem. The safety net falls on California taxpayers already fund a number of programs — Medi-Cal, CalWorks, CalFresh, subsidized housing, free lunch programs and even the earned-income tax credit.
AB5 just codifies the 2018 California Supreme Court bipartisan, unanimous ruling between contractors vs employees. In the case Dynamex Operations West v. Superior Court of Los Angeles County, the court said if you are a worker doing work that is central to the company’s business model and are under its control, you are an employee.
- CA gig workers 4m+.
- Lorena Gonzalez, a Democrat, is a California state assemblywoman, San Diego behind anti-Gig worker CA law
- Opinion | Lorena Gonzales: Uber and Lyft must treat drivers like employees - The Washington Post
Freelancers hurt by AB5 CA's anti-Gig Law
The impact on freelancers hurts freelancers in diverse ways
Loss of Flexible Work Schedules
freelancers said AB5 would force them to change the way they worked as they preferred or needed their flexible schedules. eg. a copy editor/proofreader with multiple sclerosis. So “setting my own hours makes life infinitely better for all the reasons", but AB5 had lost her contracts! National Press Photographers Association has filed a lawsuit challenging A.B. 5 representing photographers who could lose freelance work because of the law,
Freelancers already find work hard, Working for multiple employers to make a Living
Photographers and writers are stuck between the rock of dwindling to nonexistent employment opportunities are hitting the hard rock of A.B. 5
Vox Media cited A.B. 5 why it let go about 200 freelancers, was already sued by freelancers before the law changed. In one lawsuit, freelancers claimed that they worked as many as 40 hours a week but earned less than $150 a month.
- Vox estimates $7b in lost tax revenue in CA.
AB5 exempts politically connected, high paying occupations!
The exceptions we have included will ensure that independent contractors in professions where people have the ability to negotiate for themselves — such as doctors, lawyers, insurance agents, real estate agents, accountants, hairstylists and freelance journalists — are protected.
Work Life in Startups
Don't Join a Rudderless Startup (even if it is yours)
Proof of Life!
It's absolutely vital that you prove a concept before you quit a job or it could all be for nothing - Gregor Lawson, Morphsuits.co.uk
Flexible Hours is vital - enabling 12+ hours work/day yet family time!
Be a Skinflint - Outsource, Avoid Fixed Costs, Manage Scale
Outsource for better talent, keep Fixed Costs low
Fixed costs kill any startup so we used freelance designers, academics and engineers to get where we needed to get to.
Don't Waste Money for Offices - even if 2-3 people
WeWork and other co-working companies got one thing right, signing a 3-year lease is really stupid when you don't have a recurring business and cash flow.
Do everything you can to fit a startup in to your working life, rather than the other way round. .. I would arrange for a lot of [my day job] work meetings to be in London where I had set up the equivalent of a virtual office at the British Library [and I could meet City suppliers, customers]. Yet the British Library was an amazing place to do all your research because it subscribes to all those hugely expensive marketing resources you can't afford yourself and has a wonderful coffee lounge with Wi-Fi. We were a virtual business for the first couple of years and I was still employed and so it looked a lot more impressive to meet people in the British Library and chat over coffee than meet up at random different coffee houses.
Don't quit your Day Job too early
Only then you can resign from your job. Then with a clear mind you can intensely focus on scaling up.
Be Ethical about Work, IP and Non-Competes
- Be sensitive to IP, non-compete. Don't take shortcuts like using employer equipment or contacts.
It is tricky - how to launch in a related field and gain clients without getting sued. It is often an area where the odds are stacked against the lone entrepreneur who can be prevented from speaking to an employer's contacts long after their employment has ended.
If you get sued - your investors, customers will drop you like a hot potato.
"It's tricky because you have to put in a lot of hours outside work to make sure you're not taking advantage of your employer. Like anyone else, I looked at emails at lunch and took the occasional call but most of our work was done in the evenings through teleconferences and Skype." - Gregor Lawson, Morphsuits.co.uk
Can your Employer Fund you?
Sometimes it makes sense to pitch a business idea to your employer to see if it will fund the venture and provide access to clients. If this happens, it is a bonus. If things don't pan out it can also work in your favor. It may be too distracting for a large company to pursue a smaller or unproven niche themselves. So they may prefer to "farm it out" to you - let you work 18 hour days to prove the idea. They may even let you work on your own time, and support integration with company or its clients. Or if they may allow you to leave with the software and licensing agreements required to set up the new business, as well as offer access to clients. Even if there is no support, given the first right of refuse, lets them feel good, and maybe keep references alive, as well as not burning bridges. Maybe if you succeed, your bosses can come work for you :)
Use Technology to build a Virtual Organization
Technology will always be hugely important because email, social networking, video conferencing and cloud-based office software, such as Microsoft 360, make it easier to be productive on the move and hide the fact you are working on the train, coffee shop or out of a library.
Seek Help - There is a LOT of mentors, advisors out there
As a remote/virtual organization you can get a Network of Collaborators
Seek out help from a network of collaborators.
Being a virtual organisation we relied on a network of people who put us in touch with the right people we should work with,
Better to pay for Expertise instead of Burning Time and Money
You can carry on working and earning a (hopefully high paid) living while an manufacturing expert fine tunes your concept, and value engineers it.So it was nearer being ready to go into shops.
Hardware or Goods Startups
Manufacturing RIGHT, at right SCALE
A Prototype is not good enough - Industrial ID, cost of materials, Yield, Testing with Consumers
Don't Commit to huge piles of inventory, expensive manufacturing lines
Even if your design is good, and early testing shows huge demand, the actual volume demand might change. It is perhaps better to run out of product inventory than to be stuck with piles of unsold goods.
Innovate on Low Scale Production even if at a Loss
If necessary, you can make initial prototypes by hand (though China will do most of that eg electronic boards, etc), you can then delivered in a rented van before heading back to your job.
Bulk orders - great but the growth or misreading customers can kill you!
Then when you get your my bulk orders, traction proof or first retail deal,
There are horror stories of toy makers that get million dollar orders from Walmart or Target that bomb with actual customers in retail and all products are cancelled or returned.