Category: art of gig

Scroll to the bottom for the community update.

On a walk a few days ago, I spotted this sign on a shuttered restaurant front that I thought really captured the indeterminacy of the state we’re in:

Somebody, possibly the owner, had scratched out the speculative re-opening date and put in ?? question marks. Depending on what ?? ends up being, this store is either in hibernation, in a coma, or already dead. A big part of the answer depends on how much stored fat the owners had in the system when the pandemic hit. Your ability to endure uncertainty in planning horizons is almost entirely a function of fat reserves.

Here’s another sign on another restaurant/store, this one showing evidence of some fat in the system: wine available for sale.

Do YOU have awesome wine for sale? I have some (metaphorically speaking) that’s been aging in my cellar for a while, which I might break out and sell. We’ll see.

For normal people and organizations, planning horizons are extrinsic things they do not control. For normal people and organizations, the lack of well-defined planning horizons is a disastrous condition.

For example, restaurants have daily, weekly, and seasonal expectations of demand levels. Large companies operating in mature markets have quarterly horizons and earnings expectations. They have long-lead-time product launches and production schedules based on those expectations. For normal people and companies, the world has currently fallen apart.

For normal people and organizations, horizons are necessarily extrinsic because operating states are lean by design. Predictable flows over accumulated stocks. Just-in-time over time-banking. Inventory as inefficiency rather than creative insurance against weird conditions. Low-slack dependencies on others in a value chain assumed to be intact, over high-slack ones capable of enduring some disruption.

These expectations of normalcy have fallen apart in nearly textbook ways.

For those who have been in the gig economy for a while on the other hand, horizons are intrinsic things, largely a function of internal state.

You have a cash position. You have a burndown rate. You have certain robust expectations of “passive” income. You have accounts receivable. You have a certain limited ability to move revenue events around in time. You have a certain limited ability to take on debt, depending on your creditworthiness and eligibility for various relief programs. You have some wine available to sell. You have a certain learned flexibility in things you are willing and able to do for money. Once you run out of those structural options, your next line of defense is friends and family.

Normal in the gig economy is the ability to create and sustain a planning horizon between 2-6 months out. Far enough out to avert panic, not so far out as to induce complacency. We have this ability to create time horizons because we naturally, out of necessity rather than as a matter of strategy, run somewhat fat. We are the feral camels of natural economic deserts.

By the gig economy definition of normal, not much has changed.

Of course, a long enough desert crossing will kill any camel. But it’s nice to know that we inhabit an operating structure that was kinda built for this.

This is important: you are lean to the extent your business depends on extrinsic planning horizons. You are fragile to the extent you are lean. You are fat to the extent you can create your own horizons. You are robust to the extent you are fat.

To acquire, and retain, the ability to create your own horizons, get fat. It can feel really hard, but the good news is, the more fat you have, the more ability you have to create more fat, so store your surpluses in the coming weeks and months, even if they are very meager. Even if you have to buy time hours at a time rather than days or week (pop quiz: do you know how much your life costs to sustain, per hour? Do the math, you may be surprised).

I’m going to sound like a bit of a broken record through this pandemic, repeating the same thing in as many different ways as I can think of. Get Fat is the same idea as the idea of Cash, Control, and Community. Cash and community are two important forms of fat. Control is the ability to create your own horizons.

Community Update

Prompt of the week: Find and add a good business case study to the Covid19 Case Studies page on our Roam database (there’s several good ones there already that I recommend reading. The HEB case is particularly good).

New Gigs Available

• DBA needed to move SQL Server 2008 to SSIS.

• Groupmuse needs a full-stack web developer

See the Take a Gig/Leave a Gig page for details. Take or add a gig if you can.

We now have a Discord Chat Schedule and a steady lowkey stream of activity developing. There have been 5 chat sessions in the last week already. There’s a chat scheduled almost every day (there’s one tonight at 10PM hosted by Jordan), and of course you can also just show up and see if there’s someone hanging out who might want to chat. I’ll try to tweet out upcoming chats on the @artofgig account, but you may want to put a couple of the scheduled chats that fit your schedule on your calendar, so you can drop by when you are in the mood. Right now, these chats are running in trial-and-error mode, experimenting with various formats. We’ll double down on the good ones as we identify them.

Here is the Discord invite link if you haven’t joined yet.

I’ll get the community stuff organized better next week, but in the meantime, do share your ideas on the Discord. We’re taking a sort of laissez-faire approach to evolving this thing based on what people actually need and use. So trial-and-error ideas for things to experiment with are particularly welcome.

I hope all of you are taking the appropriate measures to weather this crisis we’re in. If you haven’t, my March 12 post, Gigging in the Time of Corona might help you triage your personal situation. This week, I want to take a somewhat broader view of the unfolding drama, and our place in it as members (or potential future members) of the gig economy.

Here’s the headline behind the headlines that few people are shouting out loud as yet: there has been a murder on the history express. The old Industrial Age world just died, murdered so suddenly by Covid-19 that most people don’t even realize it is dead.

The murder happened while the world was already in a weakened state — economically, politically, culturally, spiritually, ideologically, demographically, climatologically. A new world — the young software-eaten one that is frankly not ready for the responsibility — is taking its place with such rapidity, most of us are not aware that a succession event, not just a temporary substitution event, is taking place.

The world is dead, long live the world.

Why does it matter to us in the gig economy? Because for better or worse, the gig economy is firmly a part of the new world being pushed center-stage, and is suddenly being called upon to play a much bigger role in the crisis than it is used to. Instacart, for instance, is suddenly trying to hire 300,000 new gig workers. Some towns are shutting down public transit and are in talks with rideshare companies to backstop transportation. And much to my pleasant surprise, politicians have been trying to include self-employed people, gig workers and contractors in unemployment relief schemes. That’s just the tip of the iceberg of what’s going on.

While there are elements of the succession that are both orderly and long-predicted — for example, the rise of remote work, and the growing dominance of a delivery economy over a retail economy — this is not a controlled and orderly succession event. The situation is nowhere near being under control, much as governance institutions try to reassure us that it is. The industrial world was not ready to die such a sudden death, and people invested in it are still fervently hoping it will come back.

There may be a bit of a dead-cat bounce (dead-world bounce?) as immediate relief measures take effect in a few months, but don’t be fooled. Long-term, the old world is dead. This blow has been too severe. Don’t mistake the corpse jerking around due to resuscitation measures for a live entity.

On the flip side, the digital world was not expecting to step into the industrial world’s shoes so suddenly (one of the darkly funny things going on is the whiplash being experienced by tech critics — the so-called “techlash” is suddenly dead, now that app-based shopping and virtual work tools are kinda saving the world in the B-plot while healthcare workers are fighting the virus itself in the A-plot).

This unplanned succession story is part of the broader go brr story, as my meme above suggests.

To take just the piece of this chaotic succession of relevance to us here in the gig economy, consider what’s happened to the labor market.

In the last week, 6.6 million Americans filed for unemployment, almost 10x the previous record in 1982, and bringing the current total to around 10 million. The picture in other countries is going to be similar. To put it in perspective, that’s about 6% of the workforce, or comparable to the number of jobs the economy normally sheds/adds in any given normal month, but as with the comparison of Covid-19 to the flu, the direct comparison is meaningless. This is not like the normal evenly distributed transitional unemployment that the system is designed for. This is a very unbalanced surge, much like the surge hospitals are experiencing.

This graph of unemployment claims from the New York Times looks like a vertical straight line. I bet ER admissions curves are looking similar in hotspots. And unfortunately, we don’t know how to flatten this curve. There is no obvious mechanism like “social distancing” to smooth this thing out.

These are not just big, record-setting numbers. They’re fundamentally numbers that are beyond the reach of all available governance mechanisms.

To use a control theory concept, the severity of this disturbance has caused all available actuators — fiscal deficits, interest rates, stimulus checks, unemployment relief strengthening measures — to saturate. They’ve topped out far below the levels required to correct the situation.

Unemployment claims are something like Covid-19 tests: they cover only a fraction of the infected, and disproportionately reflect those ill enough to go to a hospital, and procedurally enabled to do so. In other words, 10 million is a very conservative ceiling. I would estimate that perhaps 10x as many are actually “infected” by the economic contagion and will end up experiencing some form of mild to severe economic distress before we’re done. That’s 100 million, or 2/3 of the American work force. The relatively safe 1/3 that might survive unscathed and perhaps even thrive? The tech economy. New baby world go brrr.

Some calibration. During the 2008 recession, workforce participation rate in the US fell from a high of about 67% to 63% and stayed there even though GDP recovered (the so-called jobless recovery — nominal employment bounced back, but participation rate did not). The difference was people who either gave up looking, or ended up in the gig economy in undocumented ways. That was a relatively modest structural shift. The shift that will follow this time will be much more radical, but it is unclear what form it will take.

Don’t extrapolate initial responses too naively. For example, sure Instacart is trying to hire 300,000 new gig workers even as the regular paycheck retail sector melts down. But that sort of initial natural market response may not be a valid indicator of the shape of the eventual outcome. We may see the creation of some sort of vast public works/employment program for instance, and a wave of nationalization of critical infrastructure sectors. In the US, the healthcare sector and health insurance models will almost certainly be transformed in response, for better or worse.

But to repeat my main point, the situation is not under control. The available mechanisms simply do not have enough control authority for anybody to be in control. Not central bankers, not political leaders (authoritarian or non-authoritarian), not people sewing cloth masks and baking bread at home to do their part, not libertarian preppers realizing that they stockpiled the wrong things.

The collective governance problem here is a bit like trying to steer the Titanic with a kayak paddle, after it has hit the iceberg.

The industrial world was simply not designed to be governable through such a crisis. When you look at previous crises the industrial world got through alive (relatively speaking) — World Wars 1 and 2, the Spanish Flu, the 70s oil shocks, the collapse of the Soviet Union — you always find a period where essentially nobody was in charge for a while. Luck, momentum, and emergence effects shaped the outcome and averted the apocalypse, not the designs of people who thought they were in control.

The digital world on the other hand, is capable of governing through such a crisis I suspect, but is simply not mature enough in the relevant capabilities yet.

The next 18 months will see a rapid and serious increase in the systemic capabilities of the digital world, but it won’t be enough, or quick enough, to regain control of this situation. The digital capabilities we are acquiring in war-mode right now will make the response to the next pandemic (and there will be a next pandemic) better governed, but this one is going to be a hugely chaotic succession/transformation event.

Next time we’ll have fancy blockchain based pandemic surveillance tech on our phones.

Next time we’ll have better unemployment and health insurance models.

Next time we’ll do this social distancing thing without throwing a third of the work force into unemployment.

But this time… not so much.

As every political leader is saying, we’ll get through this. But not because anybody has a plan or is meaningfully in charge.

We’ll get through this because the evidence of history suggests that the new world will emerge rapidly to take the place of the dead old world in an unplanned emergent way. In a nature-abhors-a-vacuum way. In a way that doesn’t satisfy the Brave New World design urges of any of the ideologues currently salivating over utopian reconstruction possibilities.

I am belaboring this point because I am bemused by the analysis posture adopted by so many otherwise smart people: that while this is a bad situation, it is in some sense a situation that is under control.

A reassuring picture is being painted that between global public health agencies, central banks, political leadership (however inept) and corporate agility, there is enough governance authority to actually meaningfully steer the situation. We are talking of vast deficits, radical shutdown measures, grounded airline fleets, and an emergency mode reshaping of the economy from brick-and-mortar to virtual as though they collectively constitute a thoughtfully planned response that’s proportionate to the situation.

It is not.

Nobody is in charge. Not Trump, not Wall Street, not central banks, not Dr. Fauci, not the WHO, not Xi Jinpeng, not 3M churning out N95 masks, not Amazon, not Instacart, not motorcycle gangs LARPing Mad Max futures. Not your favorite Cassandra exulting in a dark sense of their own prophetic told-you-so rightness.

Agency does not equal controllability. All these actors are doing things that will shape the emergence of the new world, but the bulk of the emergence will be ungoverned. It will involve all sorts of weird random things that get locked in as new defaults. Strange initial conditions nobody chose will turn out to be crucial in setting new directions and creating an anatomy for the new world.

So pay attention. The outcomes will not match the blueprints.

For us in the gig economy, this is the most important thing to remember as we plan our individual next moves through the turbulence. Perhaps you’ll get really lucky and your corner of the world will sail through the crisis peacefully, and perhaps come out on top. Perhaps you’ll get really unlucky and your entire life will get destroyed by this. Most of us will land somewhere in between those two extremes.

But what none of us will have is the luxury of a clearly defined role within a larger plan coordinating the response, with clear instructions on what to do next.

This is a condition we in the gig economy are used to. We are used to there being no plan. We are used to navigating open waters and ungoverned conditions. We are used to the economic wilderness in a way most of the world is not.

But that doesn’t mean we’re in a sustainably better place than the paycheck world. It just means we’ve bought ourselves a little extra time compared to most.

In a fast-developing crisis, a little extra time is worth a lot, and easy to waste, as world leaders have shown us. Use it well, or lose it.

I’ll keep tracking this situation as it evolves, and I’ll be doing my best to provide some hopefully useful running commentary on the gig economy subplot. But the bulk of what happens to you depends on you.

Art of Gig Community V 0.1

Over the last 2 weeks, we’ve gotten two community things going. It’s a bit rudimentary and hastily slapped together so it can be of some use in this situation, but hopefully we can make it better in the coming weeks.

1. A publicly editable Roam database. Start with this Welcome page.

2. An Art of Gig discord server. Here is an invite link.

I’ve also been doing a prompt of the week. Here is this week’s prompt.

• If you’re willing to volunteer to host a weekly 30 minute voice chat session on the Discord server, add your name, day, time, and time-zone to the Discord Chat Schedule page on the Roam database. I’m planning on hosting one on Friday mornings, 9:00-9:30 AM Pacific time.

I hope to grow this community infrastructure into a useful resource, especially during this tough period we’re entering. But you’ll need to pitch in for that to happen.

The COVID-19 carnage in the economy continues, as governments around the world desperately seek palliative measures. Measures which, despite their record-setting enormity, still don’t seem up to the challenge. The job loss numbers reported this morning in the US are staggering: 3.28 million people have applied for unemployment benefits in the last week. That’s almost 12 times the previous week, and about 4x the previous historical high. Vast numbers of people are joining the Involuntary Gig Economy under conditions of extreme financial distress as we speak. All the fiscal resources being marshaled seem set to be exhausted within months given the current rate of depletion.

Make no mistake: this is already really ugly and set to get much uglier. If you’re tempted to let your guard down, don’t. The first wave of news has passed, but the crisis itself is just getting started.

I’m trying to create the simplest kinds of scaffolding I can think of, but not too simple, to help me meaningfully navigate. Here is a fairly general crisis roadmap diagram I came up with, which I’ll apply to the gig economy in a minute.

Crisis Roadmap

I’m a big believer in keeping crisis response models as brain-dead simple as possible, and getting them down to checklist-level simplicity. The diagram above is my first attempt.

Right now, I think we all have to navigate a set of levels converging to a bottleneck I’ve labeled attitude reset. Once you get through the attitude reset bottleneck — a challenge that is more emotional than intellectual — you can start to think expansively, reorient, and find the plot again.

How does this work in the gig economy? Here’s my own journey so far:

1. Secure perimeter: Besides the obvious material preparations (stock up on essential supplies, restage your home for work, position your hand sanitizer bottles and masks) I mean the economic perimeter. In my case, I got my tax docs out to my CPA, closed my books for FY 2019, and updated my state awareness of my business/financial condition. Then I sent out invoices for billable hours I’d been procrastinating on, so I’ll be zeroing out accounts receivable soon and strengthening cash position soon. Despite the looming financial urgency, I made sure to get a decent contribution into my retirement portfolio, to be prepared for good investment opportunities.

2. Who needs immediate help? I’m fairly useless in this particular sort of crisis, but I did manage to rustle up a bunch of N95 masks to send to my niece, who’s an anesthesiologist at a hospital that isn’t supplying the staff with enough PPE. I also did a spot of pro bono consulting for some folks trying to pull a large-scale nonprofit response together. I am temperamentally unsuited to this sort of community-spirited, civic-minded general helpfulness, but there are times when you have to play to the needs of the situation rather than your strengths or preferences. This is one of those times. I’m reserving some bandwidth for this sort of thing. If you think I can help on some front, ask.

3. Buy time to respond: Luckily, I have a couple of months of my fellowship left to go. To buy more time, I launched my Breaking Smart newsletter (which I’d originally planned to do in May) two months early. That’s already bought me a month and beefed up my recurring revenue flow. I’m still shopping around for ways to buy more time. My goal is to lock down enough cash flow to see me through summer. I’m about halfway there. The second half is going to be a bitch. I’m expecting a sudden freeze-out in the short term.

4. Reboot senses: In OODA loop theory, a classic sign of an adversary getting inside your OODA loop is your senses getting cut off from external reality, so you start going nuts. This virus has literally done that to us, confining a lot of us to our homes, cutting us off from each other and the larger world. Take stock and recalibrate/re-establish your signal sources. Otherwise you risk responding to your own psychotic imaginings or garbage noise from sensors rendered newly useless. Without clean, relevant signals driving situation awareness, your psyche will collapse.

5. Attitude Reset: There is a LOT to respond to. Tons and tons of information, of varying quality and clarity, all jumbled up. The temptation is to respond immediately with a frenzy of activity. I think this is a mistake. Besides the basic triage responses in 1-4, it is better to take a step back and first clearly identify the attitude you want to adopt. What is your posture here? Aggressive? Fearful? Opportunistic? Altruistic? Selfish? Conservative? Risk-taking? Why? This is what I’m working on right now for myself.

6. Reorientation: Once I have my attitude reset, I expect to do my brainstorms, draw my mind-maps, model the situation better, and begin reorienting my OODA loop. I’m not there yet. Neither are you. If you think you are, you’re lying to yourself. Don’t get smug or complacent just because your preparedness level made your initial responses better than average. That just bought you a head start of a few weeks in what will be months, possibly years, of risk and uncertainty.

7. Safe-Mode Reboot: It seems hard to imagine now, but there will come a time when you will go from reactive to proactive, and start to seize the initiative once more. I expect to do so in a safe-mode first, since this is going to be a dangerous and unstable situation for a while. I think this will be around June/July for me.

8. Find the plot again: This is not the end of the world. It’s a terrible situation, but it’s not the end of the world. There’s an “other side” to this thing, even if it a permanently weird condition rather than a new normal. Right now, I think the other side is around 18 months away for most people. But there will be people who find the plot as soon as 6 months from now, and those who are destroyed by this to the point that they never recover the plot. Let’s all plan to be in the 6 month cohort, rather than the 18 month cohort, or god forbid, the never cohort.

Note the way I’ve drawn this diagram, with a bottleneck at Level 5. I think that’s a key feature of effective crisis responses. You have to converge on an effective posture while working through your triage actions, and then expand from there into a new mode of effective agency that goes beyond triage, into a new reality.

Another key is that there is no linear progress up the stack, you’ll be doing dizzying amounts of looping through the levels, as the arrows illustrate. Prepare to be a bit of a whirling dervish through this thing. Getting to a higher level doesn’t mean lower levels have been stabilized and can be ignored. It just means you have reoriented enough to handle more levels in parallel.

That’s not an intellectual condition. It’s an energy flow condition, which is almost synonymous with cash flow for the gig economy.

You’re not reoriented when you have a clever diagram representing your situation. You’re reoriented when you’re removing entropy from the situation faster than events are adding it, which will show up as a strengthening position and more agency. Gaining ground rather than losing it. For us in the gig economy, this pretty much means accelerating cash flow.

It’s not going to be quick, and it’s not going to be easy, but most of the world will make it through.

Not everybody will make it — 20,000 odd people are already dead, and nearly half a million infected. Those numbers might end up an order of magnitude higher by the time we’re done. And that’s just the first-order victims of the virus itself (which might include some of us). Victims of the economic carnage will number at least an order of magnitude higher than wherever the dead/infected number lands (and this will definitely include a lot of us in the gig economy).

I am under no illusions. By the time we’re done, many members of this list will have had their lives deeply affected. But let’s see if we in the gig economy, despite being outside the reach of most safety nets, can generate the resourcefulness to be first out the other end, as the vanguard entering the new reality we’re headed for.

As some of you know, I’ve turned into a serious fan of Roam, the novel notes app that’s been making waves lately, and with good reason. It’s a brilliantly conceived and executed product for really frictionless collaborative knowledge capture and organization.

I just created Art of Gig roam database, which I am sharing initially with paying subscribers of this newsletter. Right now, it’s publicly editable. We’ll see how it goes and later open it up to everybody. We may switch to public-readonly (with invite-only editing permission) if necessary, but I’d like to keep it as open as possible.

I had the idea of creating a Roam database for the Art of Gig community a few months back, but set it aside on my someday/maybe list, since it seemed like an important but not particularly urgent thing to take on. Well, now the pandemic has created the urgency, so let’s do it.

To get oriented, check out the Welcome page and go from there.

My plan is to evolve this iteratively by prompting all of you to do ONE simple thing each week, though of course you’re welcome to go nuts and do more.

For the first week your prompt is: Add yourself to the Directory page.

As I wrote last time, with the Coronavirus pandemic in full swing and the global economy in the early stages of a serious meltdown, the gig economy is particularly vulnerable, since it is hard for state agencies and programs to even “see” us and our needs. It’s even hard for us to see each other clearly. Let’s start fixing that.

I hope this database starts out by evolving rapidly into a helpful resource for gigsters in the immediate response to the pandemic, but then evolves into a generally useful long-term resource. Both for those of us in the gig economy, and those who need to interface with it.

Suggestions and ideas for supporting resources and activities around this are welcome. If you’re already doing something that pairs well with this, glad to create the right connections/plumbing. I’m conceiving this as just one node in a network of resources created/maintained by different people as the gig economy starts to get more self-organized.

For starters, once we have some initial content in this database, I’ll pull together a Zoom video conference for active participants to talk about where to take it and how.

I want to keep this one simple if not short, since I’m sure all of you are inundated with COVID-19 related news and developments, both locally in your communities and in your corner of the globe. I want to focus specifically on the impact on the gig economy. Let’s quickly take stock of what we’re up against, and what to do about it.

The Situation

If you’re in the gig economy, or planning to enter it, you face very unique and heightened risks compared to people in the paycheck economy. The gig economy is a feast/famine world of risks and volatility at the best of times, and times like we’re about to face are a case of double jeopardy. I’ve been through some rough patches myself over the years, but I don’t think any of them compare to what we’re about to run into.

March 1 was my ninth anniversary in the gig economy, and I’m now into my tenth year. It promises to be the roughest I’ve ever faced. Despite my confidence in my consulting skills, general history of resourcefulness, and my track record of having survived so far (or perhaps because of it), I have no problems admitting that I am worried. You’d have to be an idiot not to be, whatever your experience level.

Analysts are already flagging the extremely high risk to small businesses in general. Those at highest risk are of course in-person service business owners (restaurants, rideshare drivers, and the like) who rely on steady cash flow, have limited working capital positions, and rely on assumptions of ordinary risk management costs. Now this group is faced with demand collapse, heightened risk management costs (sanitization and hygiene protocols, greater risks of themselves falling ill), and rapid working capital depletion. Worse, most have no protections such as paid time off, a concept that only applies to paycheck types. In the United States, most don’t even have reliable, affordable health insurance, given the continuous undermining of the Affordable Care Act over the last few years.

For the most vulnerable, some large corporations in the US have already extended some enlightened protections. Many tech companies have committed to paying their hourly workers through this period even if their services are not needed. But it is unclear how long such generosity will last, given that all businesses will come under extreme pressure. In the US, it looks like small-business relief measures are in the pipeline, and other countries will likely offer similar relief.

None of this is likely to be anywhere near enough. They will be palliative measures at best. The outlook is somewhere between extreme stress and a bloodbath.

Expect many small businesses to go out of business around the world. This is going to be something of an extinction event.

For those of us in the gig economy proper — whether as platformers, contractors, or consultants — there are unlikely to be any significant protections on offer. On the flip side, our risks are also relatively lower, compared to in-person service business owners. We already mostly work remote/offsite on knowledge work tasks. Still, this is going to be something of an extinction event for us as well.

Paternalist businesses and states can’t even see us gigworkers legibly through their procedural-bureaucratic eyes, so they are not going to be able to take care of us even if they sincerely want to. Employees and traditional small businesses will come first. Gigwork is practically designed to fall through the cracks of institutional responses.

So start preparing. You’re on your own for the most part. Let’s look at the risks and how to manage them.

The Risks

For us in the gig economy, there are many risks, including, but not limited to:

1. Falling ill: If you actually fall ill, you may be unable to bill for your time for an extended period, on any gigs you do have.

2. Spooked clients: Clients in the pipeline might back out of deals/gigs under discussion, or defer them indefinitely.

3. Canceled on-site gigs: These are often the most lucrative kind, since you can bill for large blocks of time/work at once. With travel restrictions, they are on the chopping block.

4. Reallocated budgets: Suddenly tightened budgets might be diverted to other higher-priority uses.

5. Staff reassigned: Your primary client contacts might suddenly get reassigned to other roles as people in our client organization fall ill or die (or worse, your own key clients might fall ill or even die).

6. Demand collapse: What you offer may be particularly vulnerable and demand for it may collapse. On-site workshop delivery is at high risk obviously, and may be difficult or impossible to reposition as a virtual offering.

7. Force majeure clauses: A contract you’re relying on may have a provision allowing clients to back out of commitments under force majeure clauses.

8. Cash-flow crunches: An ever-present threat for the gig economy, this risk doubles during a crisis like this. You may suddenly need extra cash to care for elderly dependents.

9. Delayed invoices: As organizations get overwhelmed by their own urgent crisis management efforts, payments on your invoices could easily get delayed. This happens even during normal times. Expect more of it.

10. Deflation/cost of debt: The economy is at serious risk of deflation, which means it will be a bad time to take on debt. Take theatrical interest rate cuts by central banks with a huge pinch of salt. Even credit at 0% may be too expensive in a world of negative real interest rates.

I have faced many of these risks over the last decade, but never all at once, or with the intensity and duration we can expect now. This is new territory even for the most experienced independents. At best, people like me will be like the one-eyed leading the blind. And though I’m presumptuous enough to write a newsletter providing advice to other indies, if I’m being honest, I’m as much at risk as any of you. I’m probably only marginally above the median in terms of probability of continued survival in the gig economy.

I am personally fortunate in that I have a few months left in my current fellowship, so I have some time to prepare before I have to face this thing head-on myself. But I have no illusions about what I’ll be up against. It’s going to get tough, and I’m already taking my own advice in this newsletter and making risk mitigation plans.

Managing the Risks

There are lots of highly situation-specific things you may be able to do to manage your risks, but there are also a few general principles. As a mnemonic for these, I want you to remember three words:

Cash, Control, and Community.

It is an extension of the Cash+Control mnemonic offered by Bill Janeway in his book on venture capital/startups, Doing Capitalism in the Innovation Economy, (recommended as a generally good read) adapted for us in the gig economy.

• CASH: During a highly uncertain crisis, cash is king. Prioritize it in every way possible. Conserve it, prioritize gigs that give you cash now over cash later, even if it means less of it, focus on hardening your more passive and steady cash flows. Choose cash over in-kind compensation where possible. Avoid debt as much as possible. Defer or cut discretionary spending where you can.

• CONTROL: Do your damndest to maintain control over your business model and working life. Obviously this is easier the stronger your cash position. Keep control the IP you produce. Hold key operating assets like websites and SaaS accounts close. Pay attention to the terms of gigs. Do not accept exploitative terms for long-term arrangements that you might regret in better times. Prepare to accept some hardship to retain control.

• COMMUNITY: Do NOT become part of the problem. To the extent you have surplus cash and control over your own gig-economy position, and enjoy some security, do your best to support others in the gig economy. Keep those subcontracts flowing. Pay people doing stuff for you promptly. Look for ways to keep the gig economy going internally. If you can afford to, pay people even if you do not use their services, such as cleaning services.

Cash. Control. Community. Tattoo those 3 words into your brain for the next 18 months or so.

Beyond these general principles, you have to stay plugged in and maintain high situation awareness. Look out for any source of leverage, protection, or opportunity in your local geographic and economic environment. This is not the time to unplug and retreat under a rock, even though the stress might tempt you into doing so. That’s a luxury for the more protected classes of society. You’re out facing the elements.

That said, pay attention to your mental health, and make time for escapist diversions like reading fiction, watching television, and whatever other leisure activities you can safely continue. If you’re subject to quarantine or isolation, establish disciplines like light at-home exercise regimens, relaxing cooking sessions, and so on. If you’re not, but are still avoiding cafes and coworking spaces, get outdoors to take walks when you can.

Cultivate the obvious kinds of stress-management habits. Pay particular attention to your relationships and avoid dumping your own stress onto others. In theory, spending more time with family is always a great thing. In practice, too much time together can create enormous stress. Give each other space as needed, even if you’re all cooped up in a small apartment or house.

Be prepared for sudden spikes of emergency action (if you, a family member, or a neighbor falls ill and your local hospital is overwhelmed, what do you do?).

And don’t be afraid to ask for help from people in stronger positions than yourself, or proactively offer it to those who might be in need.

Should You Quit?

Should I quit is a serious question right now in both the ways it can be asked in the gig economy:

• If you have a paycheck job should you quit now to go free agent?

• If you’re a free agent, should you take a job to weather this rough patch?

If you have a paycheck job and were planning to make the leap to free agency, reconsider very carefully. Take all the advice in my 5-part series on making the leap, and reassess the playbook for the heightened risk environment.

I don’t want to discourage you from making the leap if you’re ready and excited for you, but don’t be dumb about this environment. Courage is good, foolhardiness is not. I myself made the leap while we were still in the very slow recovery from the Great Recession (2011), but I probably would not quit a job right now. 2011 was not a great time to quit either, but it was a predictable environment without the Great Weirding going on all around, and I felt comfortable making the leap. If you are feeling wary or developing cold feet, listen to those instincts even if you don’t act on them.

On looking for a regular job if you’re already in the gig economy, don’t let false pride about being part of the gig economy blind you to the risks. There is no futuristic honor in being a starving gig-worker. If you find that you’re struggling too much, be willing and prepared to look for a regular job sooner rather than later. Stay on the lookout for part-time jobs or quasi-job-like gigs too, such as fellowships and residencies. Being in the gig economy is merely an expedient lifestyle based on specific tradeoffs that change with the circumstances, not a dogmatic religion. You can always take another stab at it in better times if this weather is too stormy and rough for you.

That said, if you do decide to stay in the game, you may want to consider making lemonade from lemons.

Lemonade from Lemons

There are going to be many localized, specialized kinds of demand surges for expertise around very specific things in the next 18 months, including, but not limited to:

1. Crisis communications/PR

2. Rapid response/emergency operations

3. Succession planning

4. Scenarios and workshops around the risk environment

5. Analysis of impact on trade

6. Expertise on supply chain disruptions and shocks

7. Expertise on service hardening for pandemic conditions

8. Expertise in business continuity

9. Organizational restructuring for distributed ops

10. Field data collection and analysis

Even if you have no immediate interest or expertise in any of these, take some time to brainstorm the possibilities and think through low-hanging fruit options. There may be surprising things for you to do. And you may need these options later even if you’re not under immediate stress.

Many of these demand areas will present opportunities for everything from special products (a report or online course on sourcing goods from China for example), to spec work (like doing a paper-napkin level analysis of the supply chain of a specific company and sending it to their COO to pitch a more detailed study), to searching for openings/RFPs in the right places, such as hospitals and healthcare systems that need unusual services urgently.

For some of you, there may even be an opportunity to pivot or reinvent what you do around the opportunities created by this pandemic.

We are in the gig economy corner of what Naomi Klein called disaster capitalism. The phrase is almost always used in a pejorative way to describe profiteering, especially by larger cronyist companies that enjoy backing from influential political actors. But taken in a non-pejorative way, disaster capitalism has both a necessary and good side, and an ugly, profiteering side. Extreme risk environments do create unusual market conditions of demand and supply. Under such conditions, many problems should perhaps not be solved by markets at all, and instead taken over by states at least temporarily, to protect the most vulnerable from exploitation.

But that said, there is both room for, and value in, market-based responses to crisis conditions, including from the gig economy. So you do not need to feel guilty. Nobody will fault you for thoughtfully and conscientiously looking for opportunities in the crisis, and becoming part of a market-based solution to the problem we’re all in the middle of. Many will in fact be very grateful if you do something that addresses a pressing need.

But equally, there is no denying that there is plenty of room for grifting, bullshit, and exploitation of vulnerable and panicked counterparties. Be honest with yourself and resist such temptations, which will be especially attractive if you’re under financial stress yourself, as you’re likely to be.

In Summary

• We are in a heightened risk environment for the gig economy

• There are many specific risks you must think about and manage

• Approach the risks focusing on cash, control, and community

• Take the “should I quit [my job/the gig economy]” question seriously

• It is okay to look for ways to make lemonade out of lemons

• Don’t be a profiteering grifter

Stay safe, wash your hands, flatten the curve, and be smart about the next 18 months. This is going to take a while.

I’ll be doing my bit to contribute helpfully via this newsletter, and I am open to suggestions and ideas for things I could do. For starters, I have decided that anything I write that’s directly about the risk environment we’re in right now will not be paywalled.

<< The Medium is the Client | Yakverse Index | Staying With the Questions >>

I had stepped out of the cafe to take an urgent client call, and the letter was waiting for me at my table next to my coffee when I returned to my table. An expensive-looking peach-colored envelope sealed with red wax.

“Did you see who left this on my table?” I asked the barista. He shrugged no.

I sighed. Probably one of those tediously theatrical marketing stunts for some sort of stupid luxury product launch. Then I noticed the impression in the wax. It was the head of a yak.

Inside the envelope was a short note, handwritten on expensive note paper.

“A car service will pick you up at 8:00 PM tonight. — UAK”

I frowned. UAK? I knew of only one person with those initials.

There seemed to be something else in the envelope. I shook it out.

It was a single yak coin (see The Shadow’s Journey). I peered at it, and pulled out my own from my wallet to compare. They looked the same, give or take some wear. It seemed genuine.

***

The car service picked me up promptly at 8. Half an hour later, I was standing in front of a modest Class III mansion (an ISO Class III mansion is one where the front door is at the end of a curving driveway that runs between 50-100 meters from the main street-facing gate, with the building at least 80% obscured by trees).

A butler was waiting for me at the foot of the front stairs.

“If you’ll follow me sir…”

He lead me up the stairs, through the front door, through the anteroom, past a large, empty dining room, and into a discreet skullduggery room.

For those of you who have fewer dealings with the ultra-wealthy than I do, a skullduggery room is standard in Class III mansions and above, and usually contains a few armchairs, a small bar, and in the case of Class II and Class I mansions, a secure comm-line and secret tunnel to the basement lair.

“May I offer you a drink sir?” asked the butler.

“Thanks, I’ll just help myself,” I said. Skullduggery rooms, as some of you may know, usually operate on informal self-service principles.

The butler bowed and retreated.

This particular skullduggery room already had two people in it, my old friends Guanxi “6%” Gao, and Arnie Anscombe, nursing drinks.

“Hey guys,” I said, “so you’re here too. Any idea what this is about? A juicy new gig I hope.”

“No idea,” said Gao. Anscombe shrugged no as well.

“How you doing Rao? The 2x2s are flourishing I hope?” asked Gao.

I walked over to the bar, surveyed the options, and poured myself some expensive-looking bourbon.

“The drawing and quartering is proceeding well, thanks. How’s the 6% business?”

A tired look came over Gao’s face, and he stared down into his drink for a moment. I settled into the armchair next to him.

“6% of zero is zero. The damn coronavirus has wrecked my 2020 plans. All the gigs I had lined up have evaporated. I was actually in Wuhan in December, wrapping up one of last year’s gigs. Got out just in time, a couple of weeks before all hell broke loose. Now I have a couple of months to figure something out before my savings run out.”

“Damn, sorry about that. What about you Arnie? How’s the data-munging business?”

“Booming actually. A dozen leads asking about deep learning contingency planning models in the last week alone. I guess I’m on the positive externalities side of the virus. Sorry Gao, don’t mean to be insensitive. I’ll look out for a piece of action for you.”

Gao shrugged, and began to say something, but before he could, we were interrupted by a tall, gaunt figure striding into the room.

Ulysses Alexander Khan, UAK, was in the house.

***

“Khan! Long time no see! I don’t think we’ve met since that AspireKat business in 2013! Seven years!”

“How are you Rao? Anscombe. Gao. Thanks for coming, all of you.”

Gao looked concerned. He said, “You’re looking pretty run down Khan. Lots more gray in the hair I see, and have you lost weight? McKinsey riding you too hard?”

Khan headed over to the bar and poured himself some scotch, then settled into the last armchair before responding.

“As it happens, I’m no longer with McKinsey. I left about six months ago.”

“I’m not surprised, it’s not a place for enterprising people,” I said (see, The McKinsey Affair).

Gao raised his glass, “Well, welcome to the indie world, Khan.”

Anscombe peered appraisingly at Khan in his usual unsettling way. I always feel like a spreadsheet when the kid does that to me.

“Doesn’t look like you need to work anymore, Khan,” he said, and gestured vaguely at our surroundings. “Nice Class III mansion you have here.”

Khan shook his head.

“Not mine; I’m just borrowing it. You’re right though. I don’t need to work. In fact, I was going to retire. I have a modest little Class V starter mansion by the ocean in Greece. I was going to spend the next few years quietly working on a history of consulting in the Byzantine and Ottoman empires. Long-time interest of mine.”

“So why didn’t you?” I asked. “I’m guessing it has to do with why we’re here?”

***

Khan stood up.

“Gentlemen, I have been retained by a group of high-net-worth individuals, including the owner of this mansion, for a long-term engagement that will last at least a decade, perhaps several.”

“To do what?” asked Gao.

“I’ll get to that. But as one piece of it, I have been asked to staff up a global network of experienced independent consultants. Ones who are past the basic challenges of making enough money and meaning for their own needs, and are looking for more. That’s where you come in. I’m hoping to get the three of you to seed one local corner of it.”

“Well, I’m in. For the right percentage of course,” said Gao at once, grinning.

“There is no percentage. If you’re in it for the percentage, you’re not ready for this. What I’m offering is not what you’d call a regular paid gig.”

Arnie raised an eyebrow. “I hope you’re not telling us a bunch of millionaires and billionaires is expecting us to work pro-bono for the questionable pleasure of their occasional company?”

Khan drained his scotch, made an expansive gesture with his arms, and walked back to the bar for a refill.

“Gentlemen, gentlemen. You’re thinking too small. That’s always the problem with you indies. Thinking ‘power before money’ doesn’t come naturally to you. Still, your skepticism is warranted. I too, in my time, have had dealings with the Scrooge class of wealth. But as a gesture of good faith…”

Khan reached under the bar and pulled out a small wooden box, and opened it. Inside, two rows of yak coins gleamed. There must have been at least a hundred in there. He extracted three, put the box away, and returned to his armchair with the coins and his drink.

“You each already received one of these with your invitations, but…”

He slid a coin towards each of us.

“I know you have a few of these already, Gao. And you have a couple I think Rao? And you, young Anscombe, I believe had none before today? Well you have two now. They’re of course, either worthless or priceless. That’s up to you.”

He leaned back.

“Those are yours just for hearing me out. No expectations. You’re free to walk out that door after you’ve heard what I have to say. Keep the coins, pass them on, or throw them in the trash.”

The three of us looked at each other briefly.

I stood up, “let me get another drink.”

***

“My clients… sponsors is perhaps a better word… my sponsors — our sponsors if you choose to accept my offer — are, as I have said, a global group of high net-worth individuals. They are collectively worth several hundreds of billion dollars, and refer to themselves as The Club.”

“Very imaginative,” I said.

“Like the Davos crowd? Bohemian Grove?” asked Arnie.

Khan shook his head.

“No, this is not your usual partying, pearl-clutching, rule-the-world LARPing crowd. That crowd is mostly running for the hills these days. Some of them are already bugging out, in full-on bunker mode. Unbelievably banal bunch. No vision or imagination. No, this is a serious group. Dent in the universe types. Bug-in types, not bug-out types.”

“And what does this serious group want to do? Save the world? Freeze themselves until the luxury Mars base is ready for them?”

Khan smiled and leaned back.

“Why not both?” he said.

“And why does The Club want to sponsor a network of independent consultants?”

“Not just any old network, gentlemen. The Club wants me to resurrect the Order of the Yak.”

Khan paused dramatically, then scanned our faces with a speculative look on his face.

“Though maybe this time around we can find a way to get a few women into the Order too. It’s always been a sausage fest as far as I can tell from the history. One battle at a time though, we must start from where we are after all…So…what do you think?”

***

“Is this a joke?” asked Arnie incredulously. “The Order of the Yak… that’s just a bunch of pre-modern hokum… sorry guys, I know you in particular like to nerd out about that stuff Rao, but seriously. This is 2020. We’re not in a world of wizards, viziers, and assassins guilds anymore. And our clients aren’t monarchs and nobles.”

Khan looked at him and nodded.

“Perhaps, though I wouldn’t be so sure about monarchs and nobles. But we are in a world of viruses disrupting supply chains. A world possibly on the verge of climate collapse. A world of what Rao here likes to call the Great Weirding, where old certainties are crumbling, and with them, the institutions built on trust in those certainties. And that’s what the Order of the Yak has historically been about, as you’d know if you’d studied the history. Every dark age, every troubled transition between eras, every uncertain, chaotic patch of history anywhere in the world, you see the Order of the Yak quietly step up its activity, steering the affairs of the world a little more firmly than usual, shepherding it through its bottleneck crises. Or yakherding it rather.”

“Nice speech, Khan,” interrupted Gao, “but Arnie is right. Theatrical wax-sealed envelopes, antique coins, a ridiculous medieval secret society of consultants that’s been dead for centuries. What do they have to do with…” he trailed off uncertainly and looked at me.

“…with a bunch of billionaires trying to save the world in 2020?” I finished for him.

“Myth and ceremony gentlemen, myth and ceremony!” shouted Khan, getting up.

The three of us looked at him quizzically.

“Perhaps you should finish your speech,” said Gao, in a resigned tone.

“Thank you,” said Khan, and paused. He seemed to be gathering his thoughts.

“We consultants, gentlemen, do you know what we are? I mean beyond being everyday advisors, counselors, and mercenary instruments to those immersed in the fog of war, and the stream of action? What role do we play in the human drama? Why do we exist?”

He looked around at us.

“Myth and ceremony, gentlemen. We create meaning out of the fog of action, that’s what we do. Mythmaking Bardic Artistry. That’s the real MBA! We consider what is in the light of what could be, and in the process of creating forms and structures around the action, we see, we value, we witness. And through those acts of valuing and witnessing, we create the meaning in the stories that our clients enact. The history of the world, I tell you gentlemen, does not actually exist until we witness it into existence. Until people like us turn mere events into significations, history is just one damn thing after another.”

Khan paused for breath. He was getting worked up. The old fire I had first witnessed seven years ago was back, and coursing through him.

“We are stewards of the adjacent possible. Think about that. We are the guardians, champions, and evangelists of the great what-ifs of humanity. And there are times in the story of humanity when that adjacent possible, it gets just a little thicker, just a little fuller of possibilities that must be navigated, possibilities both gloomy and cheerful. Times that call for a greater shared consciousness among us constant witnesses and occasional nudgers of history. Times that call for, yes, the Order of the Yak. And at such times, we the consultants of the world, we who make it our business to consider the human condition in the context of all the scenarios that could be, at all levels from startups to nations, we have a choice before us.”

Khan glared at us, his eyes aflame with the fire of the Old Religion.

“We can either help each other help the world uncover better futures, or we can let it continue its blinkered, unreconstructed descent into hell, concerned only with our damn hourly rates. We consultants, beyond our everyday work of helping clients navigate this or that specific challenge, you know what we do? We turn zemblanity into serendipity for the entire world! Unsurprisingly unlucky into surprisingly lucky. That’s our real calling.”

He paused for breath and a swig of the scotch.

“And that’s what the Club is giving us a chance to do. Not with money, not with specific gigs, though those may well flow your way as well. No, what they are offering is a chance to grasp history a little more firmly by the scruff of its neck, and nudge it in a different direction, towards greater luck. The Order of the Yak is not just a historical curiosity my friends. It is an idea about how we humans ought to live our lives. The unexamined civilization, gentlemen, is not worth perpetuating, and it is we consultants, we who step aside from the tumult of action long enough to examine it on behalf of the rest, in order to make it worth perpetuating. And we examine it neither from the spotlit center, nor from the shadowy margins, but from the interstices. Gentlemen, we are neither part of the distracting pageantry, nor a part of the gawking, uncomprehending crowds. No, we are the ones who ensure that the show goes on, for both the actors and the audience, by weaving in and out of its liminal spaces, nudging here, pinching there. That’s who we are, that’s what we do, and that’s why, the Order of the Yak must rise again, because you see gentlemen…!”

He paused triumphantly, drained his tumbler, and glared at us.

“…because you see gentlemen, unlike birds, civilizations are unnatural things with no instincts. They must be taught to fly. That’s what consultants are for. And that’s why the Order of the Yak must rise again.”

***

We sat in silence for a moment, as Khan poured himself another drink and caught his breath.

Gao spoke first.

“So what exactly is it that you and the Club want us to do exactly? Prance around in Tibetan robes sending each other wax-sealed letters about the coronavirus? Not that I mind skulking in skullduggery rooms with quality alcohol.”

“I’m glad you asked,” said Khan, and reached under the bar again, this time pulling out three plain manilla envelopes, which he passed around to us.

“What’s this?” I asked.

Khan smiled, “Just some fodder for the first meeting of the first chapter of the resurrected Order of the Yak, should you choose to form it. What you choose to do with it is entirely up to you.”

Recent subscribers might not be aware that the original inspiration for this newsletter came from a trilogy of posts, also titled the Art of Gig, that I published on ribbonfarm in 2015 (retitled and republished here as Prelude I-III in the index below). That trilogy has now grown into an 11-part series on this newsletter, plus 2 background essays. The series explores, through totally real stories involving totally real people (I swear), the shadowy hidden side of consulting that I call the Yakverse. Many readers have told me that the newsletter issues featuring the Yakverse are their favorite ones.

I’ve put together this convenient index of the saga so far, along with short episode summaries, and navigation links inside each post, so you can easily read/reread them in sequence. For those who came in late, you may want to catch up. Episodes in this series are mostly stand-alone, but with recurring characters, and an overall longer narrative arc. If you read the whole thing in sequence you’ll probably get more out of it.

This index is public, but most of the posts linked here are subscribers only, except for the 3-part prelude, and part 8 (Maneuvers vs. Melees).

Main Sequence

1. Prelude: I: In which we meet Guanxi Gao, Arnie Anscombe, and legendary McKinsey engagement manager, Ulysees Alexander Khan, while a thought leadership crisis unfolds at AspireKat.

2. Prelude: II: In which we discover a nefarious M&A subplot involving Klongleworks lurking under the thought leadership crisis, while yet another Big Consulting firm crashes the party. What’s really going on here?

3. Prelude: III: In which an alliance of independents is forged to outwit the Big Firms, and we race to solve the real mystery, while trying to land a piece of the actual lucrative opportunity underneath the crisis.

4. The Shadow’s Journey: In which I share the origin story of how I got into consulting, earned my first yak coins, and encountered the mysterious Order of the Yak. 🔒

5. Always Be Strategizing: In which we meet The Ancient One, learn about the rare artifact known as a Strategometer, and deconstruct the parable of the three stonecutters to figure out what kind of client is best to work for. 🔒

6. Making It Interesting: In which we meet Bernie Anscombe, brother of Arnie, learn about the ancient Anscombe consulting family, and consider the subtle art of right-pricing your services to get the kind of work you want. 🔒

7. The Two Shadows of the Hero: In which we meet Agents Jane Jopp and Guy Lestrode of the FBI G-Crimes (gig crimes) division, and reflect on the mysterious Bermuda Triangle case, exploring malice, stupidity, and collusion in the consulting world. Guanxi Gao makes another appearance, and the mysterious Agent Q makes an entrance. A deep conspiracy is unveiled. 🔒

8. Maneuvers vs. Melees: In which we meet Arnie Anscombe once more, and learn all about how organizations melee with sales and finance, once the strategic maneuvering is done. We discover a tough question we cannot answer with a 2×2 and decide to seek counsel from a Higher Power. 🔒

9. The 12 Eigenconversations: In which we seek out my reclusive genius older brother, Mycroft Rao, map out the 12 Eigenconversations, and plot the course of a case study on it. A yak coin is traded and traded back. 🔒

10. The Shtickbox Affair: In which Guanxi Gao and I team up once again, to assist Agent Jane Jopp of the FBI G-Crimes division with an unusual case involving a high-tech shtick at Scorpion Arts. An unsatisfying resolution leaves us wondering whether deeper conspiracies are afoot in the consulting world. 🔒

11. The Medium is the Client: I am called in to help G-Crimes with the mysterious murder of Thomas Turtleneck, CEO of a chemicals company. Which of the four consultants did it? I apply my principle, the medium is the client, to help Agents Jopp and Lestrode at figure it out. 🔒

12. And So It Begins: In which my old nemesis, Ulysees Alexander Khan reappears with a strange proposal for Guanxi Gao, Arnie Anscombe, and me. Do we trust Khan? Do we trust the shadowy group he represents, known as the Club? 🔒

13. Staying with the Questions: In which we ponder the strange 2×2 Khan left us with, and ponder our postures for the pandemic. 🔒

14. Yakverse: Infinity Gig: In which the Yakverse Chronicles head towards a stunning resolution. 🔒

15. Yakverse: Endgame: Series finale, to be published in January 2021.

Appendices

1. The Secret History of Consulting: I 🔒

2. The Yak Zodiac 🔒

When I quit my job in 2011, I did so in large part to gain more control over my life so I could devote more time and energy to my writing. Contrary to what many of my readers seemed to assume at the time, the consulting was meant to sustain the writing, not the other way around. If I had stayed on the corporate track I was on, with growing managerial/leadership responsibilities, the writing would have fallen by the wayside long ago.

I suspect most people who voluntarily enter the gig economy are like me: they do so in part to gain more control over their lives so they can devote time and energy to a specific passion mission, and bring it into greater harmony with their money-making hustle. Way back in 2009, Hugh Macleod of Gaping Void called this the “Sex and Cash” theory.

“The creative person basically has two kinds of jobs: One is the sexy, creative kind. Second is the kind that pays the bills. Sometimes the assignment covers both bases, but not often.”

Sex-and-cash theory is how adults pursue passions. The lazy, feel-good advice to young graduates to “pursue your passion” is rightly derided as entitled trustie bullshit. Typical passions are not a natural fit for the basic life challenges of survival, financial success, social success, status, or recognition.

In fact, linking a passion too directly, and too early, to those things (a particular temptation for those with clear talents related to their passions) is often a surefire way to kill it. The primary purpose of a passion is to feed your soul, not your wallet.

In the short term, passions are generally in a zero-sum relationship with survival. But in the long term, if you don’t pursue your passions at all, you won’t find life worth living, so the question of survival will become moot.

Passion as Positive Externality

The trick to pursuing your passion is engineering the right kind of coupling between the “sex” and “cash” parts of your life.

This is becoming easier thanks to vastly improved tools and products — see for instance Li Jin’s interesting posts on the passion economy and how it is changing due to a new generation of startup products. This newsletter runs on Substack for instance, which is one of these products that has improved my own sex-and-cash coupling in the last year.

But the fundamentals are not going to change anytime soon: for all but a small fraction of creators, passion and money-making will never align perfectly, and will require a thoughtfully engineered coupling to sustain. Hugh MacLeod’s point from 2009 — “Sometimes the assignment covers both bases, but not often” — remains as true in 2020.

So a passion economy as such does not exist. The passion part of life still has to emerge, for most of us, as a positive externality from the more pragmatic, money-focused activities of life. Your passion mission may have a certain amount of natural economic potential (which newer tools help realize more easily), but typically not enough to be self-sustaining.

Take a moment to identify your passion mission (if you don’t have one you should be worried): it might be a traditional creative activity like writing, music, film-making, or game design. It may or may not have a pathway to “breaking in” to the industry devoted to that activity if one exists. It might be a maker/builder project that could turn into a startup. Or not. It might simply be something like building your own log cabin in the woods with your own hands, and developing an off-grid lifestyle around it.

Don’t let apparent financial upside fool you. Just because your passion is something money-related like (say) investing and markets doesn’t mean you’ll get rich off it. A great screenwriter probably has a better shot at making it big in Hollywood than an amateurish investor has of making it big on Wall Street going up against the pros.

Whatever your passion mission, it is the raison d’être of your indie life, or even life overall. The reason you’re giving up the security and ease of the paycheck life. The activity into which you’re going to be sinking all the freedom you earn through your money-making hustles.

Passion Mission Startup Pains

Passion missions typically extend past single projects (like writing a single book or screenplay, or completing a single hardware hacking project). They are activity streams you want to sustain indefinitely, whether or not they turn out to be financially self-sustaining. Which means you need a system.

The first thing that happens when you go indie is that your existing systems around your passion mission get shot to pieces. Your passion mission will almost certainly temporarily fall by the wayside, as you scramble to get better systems in place to navigate the much more volatile world of free agent money-making.

The transient pains will make you second guess yourself: did you in fact do the right thing? Did you end up sacrificing your passion mission while foolishly imagining you were making more room for it?

The second-guessing and doubts are justified, because indeed, that can happen. For hobbyist levels of creative ambition, a steady paycheck job that you’re not too ambitious about, with free evenings and weekends, is a much better setup.

But if you’re serious, and want to take your passion mission places, the indie life situation is definitely a far better environment for it, once you do the things necessary to make it work. It won’t happen magically.

The making-it-work goes both ways. The passion mission has to inject soul into the money-making activity, and the money-making activity has to be artfully arranged around the core creative disciplines of the passion mission. Either both are sustainable long-term, or neither is.

And you heard that right: you arrange the money-making around the passion work, not the other way around. You try to reserve your most alert and creative days and hours for the passion work. The passion work sets the constraints within which the money making has to work out.

In the beginning this is hard. A “weekends and evenings” hobby in an easy 9-5 job of 40 hours a week easily amounts to about 16 hours a week (say ~1-2 hours every weekday evening, 8 hours on the weekend). You can get a lot done in that kind of time. I did the first few years of my blogging this way.

When you are starting up on the other hand, everything gets in the way. When you’re not hustling hard to make money, you’re doing more household chores because you have less cash. Plus there’s the general background anxiety. So in the first year or so, your passion-mission time availability might plummet to just a few hours a week, and they won’t be high quality. Even if you saved up a lot of launch money, the anxiety of the runway eventually running out will contaminate the freedom to work on your passion mission. Passion missions are best fed with sustainable time and money surpluses, not by drawing down savings.

But slowly, as you stabilize in your new life, you’ll reach a new equilibrium where you can spend a lot more time, in terms of both quality and quantity, on your passion mission. The passion mission can become your actual job. Writing for me today is a 9-5 weekday thing, not an evenings-and-weekends thing.

I’ll be exploring passion missions more in the next few weeks. Not least because I myself am in the process of seriously rebalancing my sex-and-cash portfolio to take advantage of the great new capabilities available today.

Take a moment to share yours in the comments or via email if you like, and post any questions you might want me to address. I can’t promise to address them, but I’ll try. Here are some of my own starter questions I’m thinking through right now:

1. How do you sustain a “shipping” discipline around your passion mission?

2. What is the difference between a hobby and a passion mission?

3. How do you model and engineer the coupling to money-making?

4. What kind of ambitions should you harbor for your passion mission?

5. Is there an ideal sex/cash balance, and if so, how do you get there?

6. How does the balance evolve over time?

7. What is the deeper yin-yang coupling between the two?

Sorry for missing last week’s issue. Between an event I was hosting, a bit of travel to the Bay Area, and catching my second cold 🤧 of this awful cold-flu season, I just couldn’t get it out. I need to make up a proper posting schedule with a sick weeks/vacation weeks policy on my about page, like OG newsletter-er Ben Thompson does. I’ll do that soon.

The cold got me thinking about how fragile indie businesses are. Fragility is a better framework than precarity for us, since it focuses on internal structural things potentially within our control rather than external risks that are not (“precarity” has also become overloaded with political baggage lately, so I’m going to avoid the term).

I can’t find statistics for the gig economy, but we’re all effectively small businesses, so I’d expect trends to be similar to small businesses in general. Here’s a chart from the US Small Business Administration for the American case. I expect most of the developed world presents a similar picture. Only about 50% of small businesses survive past the 5th year. At my 9 year point, the survival rate is 40%, so 3 out of 5 people who went indie the same year I did are now out of the game.

I suspect this picture looks far rosier than it actually is. I once met a guy at an airport who specialized in franchise-startup consulting, helping aspiring small business owners choose and set up chain franchise restaurants. He claimed that the survival rate for franchise operators past 5 years was like 70%, but for non-franchise restaurants it was less than 10%. I haven’t verified that, but it sounds roughly right and matches anecdotal evidence I’ve encountered elsewhere. So small businesses that are effectively part of ecosystems underwritten by larger businesses borrow some robustness from their mother ships, but give up some margin and equity appreciation potential in return.

On the other hand, fragility questions always remind me of Kongō Gumi, which was, for a long time, the oldest continuously running business in the world. It was a small Japanese family firm specializing in Buddhist temple construction. Founded in 578 AD, it finally shut down in 2006, succumbing to very banal financial hardships of the sort any business might succumb to. It was acquired by a larger company (I doubt the terms were good, or commensurate with the brand equity of 1442 years of operation — distressed businesses are generally sold for pennies on the dollar).

Point being, it did not take a Godzilla attack to end the long game for this 1442-year-old mom-and-pop shop. Just some routine errors that would be recoverable for businesses in good shape.

Both the SBA actuarial statistics and the peculiar longevity and tame ending of exceptions like Kongō Gumi invite analysis. Is the latter an existence proof of an antifragility strategy available to us one-person bands that we might discover by digging into such cases? Or is it a fooled-by-randomness effect, with examples like Kongō Gumi merely being exceptions that prove the general rule that small businesses are fragile?

Fragility and Scale

I personally think the longevity of Kongō Gumi was pure luck. A random data point from an unusually stable business sector in an unusually stable and conservative country. I doubt we could construct a real playbook for business longevity by looking into its history. If somebody wants to try and prove me wrong by actually researching the case, and similar cases (here’s a list of oldest companies), I’ll be happy to post your findings here as a guest issue.

First-principles analysis would suggest that in general, the smaller a business, the more fragile it is likely to be. And nothing is more fragile than a one-person business operating in the gig economy.

A simple bout of the flu can be as devastating for a gigworker as a hurricane for a larger business. I think I have enough earned trust that I wouldn’t expect a lot of you to unsubscribe if I had to take a week or two off due to illness. But what about 3 months? Or 6? Or a year?

I don’t think your goodwill and concern for my health or financial wellbeing would extend that far. Beyond a point, I’d have to shut the newsletter down and find replace the income with an alternative source that can weather extended illness.

The fragility on the consulting side is even more drastic. One of the things I worry about is: what if I land a big, time-bound gig of say 3 months that I expect to pay my bills for 6 months, but then something like a parental health emergency forces me to go be in India for a month, unable to work on the gig? A paycheck employer would likely be understanding and work with me to figure out a revised schedule of work deliverables, or take unpaid/partial salary time off. A consulting client? I’d expect the gig, especially with a new client, to either evaporate, or go to someone else.

These are harsh risks that you must not be in denial about if you are in the gig economy, even if you don’t have good solutions to managing them. I certainly don’t have answers. But that’s not a good reason to sweep the questions under the rug.

This is something I try to be conscious of as I write this newsletter. Having been in the game for 9 years, there are certainly some things I understand better than those of you with less experience, and certain risks and challenges I navigate better. But there’s a vast universe of uncertainties and risks I understand no better than any of you. My only advantage on those fronts might be not being in denial about their existence.

I’ve had enough near-misses to lose any false sense of security I might have developed in the wake of the first flush of self-confidence from landing my first couple of gigs.

Small is Fraught

Many lines of business that indies like getting into do not allow for easy scheduling of breaks, interruptions of service, or service-level degradations. “Passive income” is mostly a myth.

Though you are only a single human, you are seen as a business, and people expect the kind of reliability and stability they expect of bigger businesses with far greater redundancy in capabilities. This often means indie businesses put themselves under enormous pressure (and take on the resulting health stress) to deliver to expectations set by bigger businesses. That’s why you hear of hard-working small business owners, in sectors like cheap restaurants or convenience stores, who haven’t taken a day off in years, let alone a vacation. They work to a 24-7-365 SLA, and don’t have the staffing redundancy to cover for their personal absence.

At the other end of the load-factor spectrum, there is the kind of spiky gig work where you can make enough in a month or two to pay for an entire year. But then you don’t have strong control over the timing of the spike. If the opportunity spike coincides with an emergency spike, you get hit with a double jeopardy: you lose the income opportunity, and you have to deal with the emergency related expenses. It’s what Charles Perrow labeled a normal accident — a condition in a complex system (like nuclear reactors or the modern gig economy tech stack) where two unrelated and ordinary risk events coincide to create extraordinary risk conditions.

This risk was driven home for me last year, when my father-in-law fell seriously ill and passed away in August. His passing demanded both time (more from my wife than me) and significant expense, over several months. At the time, I had just started my year-long fellowship with a predictable income, and had decent reserves and inbound invoice payments, so we were able to weather the incident relatively gracefully in financial terms. But I couldn’t help but run the counterfactual in my head: what if this had happened when I’d been in a cash-flow slump with low reserves and no invoices due, and no longer gigs on the horizon? Or worse, on the cusp of a major spike-income gig that I might have had to turn down? It might have been enough to knock me out of the game, drain all my reservers, drive me into long-term credit-card debt, and force me to look for a paycheck job on an emergency basis.

This is not a theoretical scenario. I’ve come close to that condition 3-4 times in the last 9 years, but fortunately never actually had to drop out. But my wife and I still have three elderly living parents between us, plus all the usual risks everybody faces: illness, disability, catastrophic losses, and so forth. And insurance can only play a limited role in managing this risk. Much of the risk mitigation has to come from cash flow management and savings/investment habits.

The line between continued survival in the gig economy and crashing out of it is a very thin one, no matter how long you’ve been in the game. Don’t get complacent about either the risks, or why the risks are worth taking on (short answer: freedom).

Antifragile Gigwork

Can small businesses and gig economy careers be made antifragile by clever design? There’s some evidence that there’s some room for that. Research out of Royal Dutch/Shell that led to a book called The Living Company by Arie de Gues suggests that there are two factors (ht Mick Costigan and Peter Schwarz at Salesforce for ELI5ing the findings to me) driving company longevity.

1. One of those factors is an open, experimental culture. Nice. You and I, brave exploratory adventurers of the gig economy, we’ve got that covered.

2. The other factor, unfortunately, is simply levels of reserve resources. Financial conservatism in short. Yikes.

Unfortunately, I think the second factor is by far more important for smaller businesses, and almost the whole factor for indies.

This finding jibes with the observation, in Bill Janeway’s book on the startup economy, Doing Capitalism in the Innovation Economy, that what gets startups through turbulent times is simply cash and control. Cash reserves (raise more funding than you need if you expect a downturn, and hold on to it) and control (keep control of your company/board) is startup survival 101.

I think we can reasonably extrapolate such findings to the gig economy, with extreme added prejudice. These ideas apply much more strongly to us, since our incomes are usually based neither on securitizable assets like restaurants, nor on VC-investible activities like startups. We generally do not have access to OPM (Other People’s Money) even for things paycheck people take for granted, like home-buying. This picture is changing. Now that I’ve been in the game long enough, I routinely get working capital loan offers from services like Paypal and Stripe (as well as scammy offers via shady phone calls). But it’s very limited kind of access to OPM, and definitely not cheap capital. More importantly, I don’t feel comfortable taking on that kind of OPM debt without a more capital-building type plan to generate a higher return rate than the interest rate. And most of us in the gig economy aren’t building up capital assets, only goodwill and reputation. If we were, we’d be startups.

The question is, can we do anything about these operating conditions, or are we doomed to be the canaries in the coal mine of the economy at large, the first to get slaughtered by bad times?

Are You a Lindy Indie?

Nassim Taleb popularized a good lens on fragility: the Lindy effect. Applied to our problem, the idea is, if a thing has survived for N years, you should expect it to survive for another N years. So I’ve been surviving in the gig economy since March 2011, and if my hustle is Lindy, you should expect to be in business till March 2029 right now.

The Lindy effect is something of a blackbox model though. You can’t just assume it holds. You have to open up the box and figure out if, how, and why. Then, perhaps, you can pose “Lindy” as a design challenge to solve for.

If you accept the openness+reserves model I referenced, and approximate survivability as just a function of reserves, Lindyness is really just a kind of 1:1 ratio between expenses run rate and reserves accumulation run rate. A very simplistic model looks something like this:

The reserves might be in many forms: liquid cash and cash-equivalents. Assets like home equity you could use for securitized debt. Accounts receivable. Relatively low-maintenance income streams like ebook sales that won’t turn off overnight if you stop maintaining them.

But whatever form they take, being a Lindy Indie really just boils down to building up reserves. Far more reserves than paycheck economy types build, because we in the gig economy typically lack the risk underwriting benefits of being tethered to a larger, less fragile entity.

This goes beyond just structural effects like employment itself, to things like having a strong community of friends and colleagues who might pitch in and help you when you’re in trouble. For most working adults, a significant fraction of their social capital is also tied to being in a job.

Indies have to make do with a much smaller social safety net of close friends and family they can call on.

So where does that leave us? If we want to be Lindy Indies, we kinda have to design Lindyness into our businesses ourselves. The brute force answer is to simply cut down expenses till they are half the after-tax income, saving the other half in conservative reserve form (cash).

This is a shitty answer, and basically impossible for most of us.

Are there better answers? I’m going to explore the question in future newsletter issues.

The most common hard question I get around consulting work is: how do I find clients to get bootstrapped as an indie consultant? It is at once the most distastefully grubby practical question you can ask, and the most sublimely philosophical one.

In this issue, I want to offer an answer based partly on my recent ribbonfarm post, The Internet of Beefs, which went viral a couple of weeks ago. It’s a genuinely dangerous answer that can screw up your indie consulting career if implemented poorly, so I want to present it with some care. Read the whole article through and think carefully before adopting this approach, since running with it half-assed really can blow up in your face and make you not just unretainable as a consultant, but too toxic to even employ in a regular job. This is not theoretical. I know people who’ve blown themselves up this way.

Clayton Christensen, 1952-2020 photo by Remy Steinegger CC BY-SA 2.0

This is also my tribute issue for Clayton Christensen, developer of the disruptive idea of “disruption”, who passed away last week. You could say that the answer I’m offering in this issue is a way to approach indie consulting bootstrapping as a non-classical disruption problem. Non-classical because you are the disruptive product, not something you design.

Again, not being theatrical about the risks here. They are real. I offer some safety tips at the end. Primum non nocere and caveat emptor etc.

Bootstrapping ≠ First Client

The question of getting clients is distastefully grubby because there are so many soul-destroying bad answers out there that will kinda-sorta “work” in the sense of generating income, but will dehumanize you and practically make you want to kill yourself. Which explains why so many of the people who seem able to make them work either clearly have no soul, or are in deep denial about their ongoing destruction of it.

On the other hand, it is sublimely philosophical because if you squint a bit, it is almost the same as why do I exist and what is the meaning of MY life?

Many aspiring indie consultants manage to land a first client via a mix of mighty struggling, selling themselves short, and luck. Then they fervently hope that that first gig will magically turn into a steady stream of gigs via referrals.

Then they are shocked when that doesn’t happen. Landing the second client turns out to be just as hard or harder. And the third, and the fourth. Eventually beginner’s luck dries up and they face gambler’s ruin. Because that’s what this approach is. Gambling. You aren’t bootstrapping at all. You’re just failing painfully slowly. Your best outcome is actually to fail fast enough that you can go back to the paycheck economy without your psyche destroyed by the experience.

Bootstrapping is not about getting your first client, but discovering your first non-brute-force mechanism for driving demand that actually works.

Of the 3 layers of the free-agent world, which I covered last week, indie consultant, contractor, and platformer, the question is only meaningful and hard at the indie consultant level. The mechanism is simpler at lower levels of the gig economy. Contractors just have to do a slightly different version of a job hunt, and platformers simply have to sign up on some website. They face what Peter Thiel called a 1-to-n problem. You are solving for becoming the nth Photoshop jockey or the nth Uber driver.

Indie consultants are faced with a 0-1 challenge: true bootstrapping. They have to become the first version of themselves that there is a demand for. They have to sort of “IPO” as a unique stock in a public conversation, not labor anonymously backstage.

I don’t have a general answer — this is very much a 1:1 coaching type problem — but I do have a general approach to an answer, which relies on beefs. Let me illustrate with my own case.

Case Study: Me

The top 3 articles of the hundreds I’ve written, in terms of how much they drove cold inbound leads for consulting gigs, are the following. What feature you think they have in common?

1. The Gervais Principle (2009): A dark/satirical take on office politics and corporate sociopathy that went hugely viral back in the day.

2. Entrepreneurs are the New Labor (2012): A cynical take on heroic valorization of founders, arguing that VCs are to founders as management to labor.

3. Fat thinking and Economies of Variety (2016): A post arguing for fat startups and messy, wasteful, play-like innovation over “lean” thinking.

It’s not that they are dark and satirical or contrarian. I’ve written other dark/satirical or contrarian things that led to no gigs.

It’s not that they showcase deep expertise in a subject. They don’t. In fact they largely showcase my shallow, self-taught amateurishness on the underlying topics.

It’s not that they offer step-by-step playbooks to solving the problems they frame. They don’t.

The correct answer is that they each pick a beef worth picking, but not too strongly.

• The Gervais Principle picks a beef against feel-good “nice” management thinking that dominated the pop-business literature at the time (I helped drive the surge of interest in darker understandings of business circa 2009-12 I think).

• Entrepreneurs are the New Labor picks a beef against people in the tech sector shilling what has come to be known as “hustle porn” and flattering founders with a Hero self-image that blinds them to industry dynamics and debilitating behaviors.

• Fat Thinking picked a beef with the lean six-sigma crowd in big corporations, and the lean startup crowd in the startup scene.

But importantly, none of these is what you might call “pure beef” where the fight and criticism of an opposed perspective are the main focus or content.

They are what you might call “20% beef.” Where the starting point is rejecting some core sacred-cow axiom of a prevailing orthodoxy, and then building something new and interesting, based on additional ideas and novel elements, on that foundation of principled dissent. It is something like rejecting Euclid’s parallel line postulate and going out on a limb to see if you can build a non-Euclidean geometry.

For example, the assumptions I rejected in my 3 articles above are:

1. Executives are nice and managers know what they’re doing (Gervais Principle)

2. Entrepreneurs/founders are heroes (New Labor)

3. Efficiency and optimization are good things (Fat Thinking)

So one good answer to how to bootstrap from 0 to 1 is: indie consultants bootstrap with beefs. It’s not the only way, and it’s certainly not the safest way, but it’s a fun way that is very intellectually satisfying and validating when it works, and is the opposite of soul-destroying and dehumanizing.

But implementing that answer is a remarkably hard challenge, because it involves a delicate bit of threading the needle, and sending a hard-to-fake disruption signal out in the world.

Too Much Beef, Too Little Beef

Bootstrapping with beefs can fail in 2 ways: via too much beef, or too little.

On the one hand, you can adopt too beefy a posture and end up crashing into the Internet of Beefs. This is pure downside.

I’ve done that. For example, an early book review I wrote, of Blue Ocean Strategy, (2007) was pure beef. Another, a review of Seth Godin’s Tribes (2008) had the same problem. In both cases, I stand by my criticism, and believe they are bad books. But the point is, the reviews were 100% beef. I didn’t reject selected premises and build something else better on the alternative foundation. In both cases, it would have been possible; I just didn’t bother to do it. I did the equivalent of criticizing Euclid’s Elements with a “geometry is bad and geometers are evil” line of attack rather than building a non-Euclidean geometry.

On the other hand, you can put in a lot of work into posts that solidly cover a topic in an entirely non-beefy way, and get a lot of gratitude and praise, but generate no leads. This is a “safe” way to fail in the short term, but in the long term is death by slow starvation.

I’ve done that too. Three examples of my own are The Seven Dimensions of Positioning (2010), Economies of Scale, Economies of Scope (2012), and Product-Driven vs. Customer-Driven (2014). I had high hopes of all 3 as consulting lead-gen essays. But though I got a lot of praise and gratitude for them, as lead generation essays they were utter flops. Why? Because they weren’t alternatives to existing ways of doing things. They weren’t non-Euclidean geometries. They weren’t beefy disruptions of prevailing orthodoxies.

Bootstrapping with beefs doesn’t have to be done with writing. You could do a book, or a talk, or a show-over-tell artifact that falsifies a commonly held belief via counterexample. Or even just a twitter rant. If you’re not a creator type, you could develop a sales pitch for use in 1:1 conversational selling that’s based on a beefy take. There’s many ways to “go non-Euclidean”.

Many ways, but no easy ways. Discovering and developing a genuine beef into an artful calling card that lands you gigs is hard work. That’s why it’s a costly signal. You can’t fake it by simple bullshitting.

You have to put in the work of:

1. Spotting a widespread pattern of disillusionment in the margins

2. Identifying the prevailing orthodoxy driving the disillusionment

3. Analyzing its foundations

4. Rejecting one or more flawed premises driving the disillusionment

5. Adding imaginative alternative premises

6. Running with it to see where the whole thing can take you

7. Becoming conscious of what and who you’re for and against

8. Articulating it out there in public and standing behind it.

Yes, this is just Clayton Christensen’s ideas applied to you, personally, as an idea economy product, finding and serving an underserved marginal market before attacking the core.

The work is hard not because it takes effort or time. None of those articles took me more than a couple of days to write. The work is hard because it takes a certain amount of courage and a good deal of taste. If you don’t feel a bit of an adrenalin rush, a sense of a fight-or-flight, a sense of burning bridges, while working on them, you’re not doing it right.

Without this work, you’ll end up with either too much beef or too little beef, and be left with either a pointless fight or deathly silence.

Differentiation = Right Amount of Beef

Why does 20% beef work as a bootstrapping solution?

Last week, I noted that indie consultants pursue a differentiation strategy in terms of Michael Porter’s 3 generic strategies (differentiation is indie consultants, focus is contractors, low-cost leadership is platformers). But most beginning indie consultants don’t understand what differentiation means in our line of work.

Even ones who’ve figured out a differentiation that works often are unsure about how/why it is working. They just pray it doesn’t suddenly stop. Hell I was that way as late as 2014, three years into my indie career, as evidenced by the date of my last “failed lead-gen” blog post cited above.

So what is differentiation for an indie consultant?

Differentiation is the right amount of beef in your positioning; notionally about 20%.

Most mistakenly assume differentiation is about a nice website with pithy, superlative-laden positioning statements, glowing testimonials from nobodies, and professional headshots. All pulled together with a headline declaring something like “I help executives deliver value by blah blah blah zzzzzz 😴😴😴”

No, that’s not a differentiated offering. That’s a commodity offering putting on a nice suit.

See the thing is, as an indie consultant, you’re not selling a product that can have different “features” relative to the competition. Nor are you claiming skills others lack, or 5-star ratings putting you in a top performance category. That’s contractors and platformers. People who sell maker skills or just plain labor.

You are modeling a clear, generative way to break away from something that a lot of people are disillusioned with.

You’re offering an irreversible path of political action.

You’re making your support for that action mean something by association.

You are meaning.

Some of you will recognize the element of Hannah Arendt philosophy in here: we’re talking about “action” in a spotlight over “making” or “laboring” backstage. I highly recommend The Human Condition as philosophical background here.

Beefy Positioning

All indie consultant positioning that works amounts to: it doesn’t have to be this prevailing orthodox way that you’ve been disillusioned by, there is another, better way, and here’s how you go down that road.

Even if there is a product-like element to what you’re offering, like say a workshop or training package, it’s not the quality or effectiveness that matters, but the fact that it embodies a true, bridges-burned alternative to something that isn’t working.

And when you’re offering services to senior executives in particular, VP and up at mid-to-large companies, the “alternative way” is the sum total of what they’re buying.

They don’t need your expertise. They are the experts in their business.

They don’t need your hands-on doer skills. That’s what contractors and employees are for, not consultants.

They don’t need raw labor. That’s Uber-for-X, whatever their X is.

They don’t need you for rah-rah motivation driving them from mediocre to superlative performance (or pretending to). That’s for middle managers and rank-and-file.

Executives typically got where they are not by being exceptional performers, but by being bold and opinionated decision-makers who took interesting risks with a broad but mediocre set of abilities. They’re generally in the market for opinions worth betting on, not knowledge or skills per se.

They need you as an ideological partner-in-arms to drive an “alternative way” agenda through. You are their ideological optionality. Betting on you should represent a meaningful risk.

And you can’t just create ideological optionality by painting a cloud of superlatives around your headshot, and expect that halo of meaningless blather to do the work. You have to offer something like a weaponized schism that they can use to force a decision, and drive the action down one road rather than another. That’s what the 8-step recipe I outlined earlier aims to craft.

It’s a tall order, and fraught with all sorts of risks if you actually try it. So here are some safety rules for running this 20% beef bootstrapping playbook, whatever medium you choose.

Safety Rules!

Here’s a set of 12 rules that can help to keep you safe and generative when you try to bootstrap with beefs (or level up your game). They aren’t guaranteed to keep you perfectly safe. Conflict is by definition risky. You might misjudge a tone. You might push too hard or not hard enough. You might provoke someone who goes all psychopath on you. You might get hijacked by your own emotions and get sucked deeper into a fight than you intended to. You could get distracted from trying to solve a problem to trying to make an adversary suffer.

But still, following these rules should load things in your favor, and mitigate the risks.

1. Add 3-4 novel elements for every 1 rejected orthodoxy element

2. Warren Buffett rule: praise by name, criticize by category

3. Offer an exit to a better way, rather than a voice in a fight

4. Bring out the funny side, which is not the same as being haha funny

5. Reject what you reject with force and clarity, don’t pull your punches

6. Embrace what you embrace with doubt and qualifications

7. Follow your truth where it leads you, not your adversaries where they draw you

8. Openly acknowledge any motivating resentments and set them aside

9. You don’t have to pick every battle, but you do have to pick a few

10. Disengage from the rejected way, do not seek to destroy it

11. Firmly reject resentment-driven mooks who want to fight for you

12. Be kind. If you forget every other rule, don’t forget this one.

So that’s it.

RIP Clayton Christensen.

Go forth and disrupt, with 20% beef.