All over Silicon Valley, venture capitalists are asking entrepreneurs “How scalable is your business model?” What they really mean is, “Can you grow without having to hire people?”
In our digital economy, value creation and job creation don’t always go together. Consider that Whatsapp just sold for $19 billion with only 55 employees. It used to be that business growth led to job growth. But as machines get smarter, labor becomes a reluctant necessity. Companies only hire as a last resort.
But what if the purpose of a company was to employ people? Instead of hiring enough people to make the greatest profit, it would make enough profit to hire the greatest number of people.
Put simply, these “job entrepreneurs” maximize jobs instead of profits. There is a precedent in this. “Social entrepreneurs” seek to maximize purpose over profits. They take a social problem, like health, poverty, or the environment, then work on finding a business model that can remedy the problem. They seek to make enough profit to make the greatest social impact.
Job entrepreneurs take a similar approach. They start with a group of people they seek to employ, then work on finding a sustainable business model that leverages their talent and experience. This isn’t about job placement. There are many organizations that help people find jobs in other companies. Job entrepreneurs bring people directly onto their own payroll.
One pioneer in the “job entrepreneur” movement is Dave Friedman. Two years ago, Friedman left his position as a Fortune 100 executive to start a new venture. His goal was to employ people on the autism spectrum – individuals who have traditionally been unemployable.
Friedman considered creating a traditional startup, but he realized that his goal was different. He didn’t want to maximize profits but rather employment. Many advised him to setup a non-profit. But Friedman didn’t want to rely on grants and donations. He believed the business needed to generate a sustainable profit to foster discipline and efficiency. He also wanted his employees to know that their jobs weren’t just charity, bringing a source of authentic empowerment.
Some advised Friedman to create a social enterprise, but the models didn’t really apply. Friedman wasn’t changing how the product was made (e.g. organic or sustainable) or where it was sold (e.g. low-income buyers). He was focused on changing who gets hired. Like social entrepreneurs, WHY mattered more than HOW MUCH. But in this case WHO mattered more than HOW or WHERE.
Without an existing model to guide him, Friedman set out to make his own. He had a powerful belief that people on the autism spectrum represent an exceptional yet hidden workforce. But he needed a business model that would turn what others saw as a deficit into a source of competitive advantage.
Friedman found his answer in what he calls “Process Execution” jobs. These are labor-intensive activities such as website maintenance, data entry, and software testing. Many companies struggle to fill these positions. But the repetitiveness and attention to detail are well-suited to the talents and abilities of people with autism.
As much as possible, Friedman downplays the fact that his employees have autism. He is not looking for charity. He wants to compete on the same playing field as other companies providing similar services. But on the inside, AutonomyWorks is unlike any of its competitors. Friedman has redesigned the way work is structured, organized, and managed to suit his employees.
With these changes, Friedman has found that not only can AutonomyWorks match traditional competitors, but it can produce better quality at a lower price. By generating profits, he is able to hire more people and fulfill his mission. In the process, he has empowered an overlooked workforce and relieved families of the costs of supporting autistic relatives.
Another company following a similar model is Shinola, a Detroit-based manufacturer originally known for its shoe polish. Shinola has recently reinvented itself to create jobs for unemployed auto workers. Like AutonomyWorks, Shinola started with jobs and worked backward to the business model. In this case, auto workers have unique skills in light manufacturing and upholstery. So Shinola produces watches, leather goods, and handcrafted bicycles. A traditional entrepreneur wouldn’t set out to make this combination of products. But for a job entrepreneur in Detroit, it makes all the sense in the world.
So what does it take to be a job maximizer?
- Choose Your Talent. Who do you want to employ? AutonomyWorks focuses on people with autism. Shinola focuses on former auto workers. There are many other segments of the labor force who are underemployed or underutilized.
- Find Your Market. What products or services can these workers best make or provide? This is where the entrepreneurial magic comes into play. You need to find something that suits your people and also generates a sustainable profit. Friedman recommends looking for markets where work has been off-shored or automated, and that have low capital requirements.
- Design Your System. What innovations do you need to meet the unique needs and bring out the best in your workers? This might involve rethinking hiring, process design, management, or organizational culture. The key is turning people’s disadvantage in society into your company’s competitive advantage in the marketplace.
Over the last twenty years, we have successfully created an entirely new economic sector in which social entrepreneurs maximize purpose over profit. It’s time to turn this entrepreneurial spirit on a new goal: job creation. We need more people like Dave Friedman and more companies like Shinola — job maximizers and employment entrepreneurs.