Paul Wallbank – Brilliant Communications

Tag: demographics

  • How smart hiring paid off for the PayPal mafia

    How smart hiring paid off for the PayPal mafia

    One of the challenges facing people who’ve started their own businesses is re-entering the broader workforce. Many managers are reluctant to hire previously self employed workers; the PayPal experience shows that attitude could be hurting working

    At the Dreamforce Conference in San Francisco yesterday three PayPal alumni, part of Silicon Valley’s infamous ‘PayPal Mafia’, discussed why the company was such a successful incubator of talent.

    “The company was composed of a bunch of young folks who were very driven,” said founder of LinkedIn and early PayPal employee, Reed Hoffman. “Once they sold the business to eBay they weren’t the type to retire.”

    Along with PayPal’s founders being driven, the company also tended to hire people who had run their own businesses but were finding the  going tough in the economy at the time; “Silicon Valley was collapsing under its own weight,” observed PayPal founder and fellow panellist Max Levchin.

    “There was a lot of running for safety in the Valley,” Levchin remembers. “We were looking for people who were into risk taking and were excited to take a risk and this would be the last company they worked for because the next one would be their own. As a result we biased the selection towards entrepreneurs.”

    Copying that hiring practice today is Stripe where co-founder John Collison told Decoding the New Economy last month that one of the keys to managing a fast growth business is to hire entrepreneurs and former self employed workers.

    “They are self starters; they don’t need much supervision,” said Collison in describing how hiring people who’ve run their own businesses makes running a business that has gone from ten to 150 employees in three years.

    it’s no coincidence that one of the investors in stripe is Peter Theil who along with Levchin founded PayPal and is probably the best known of the ‘PayPal mafia’.

    PayPal and Stripe’s experience show the folly of overlooking workers who’ve run their own businesses; in a world where business is becoming more competitive, having entrepreneurial employees is an asset too good to miss out on.

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  • Times get tougher for journalists and the middle class

    Times get tougher for journalists and the middle class

    Journalists have had a tough time over the last twenty years and it’s about to get tougher.

    Last July The Associated Press announced they will automate most of their business reporting. AP’s Business News Managing Editor, Lou Ferrara explained in a company blog how the service will pull information out of company announcements and format them into standard news reports.

    instead of providing 300 stories manually, we can provide up to 4,400 automatically for companies throughout the United States each quarter

    This isn’t the first time robots have replaced journalists, three years ago National Public Radio reported how algorighms were replacing sports reporters.

    Ferrara admits AP has already automated much of its sports reporting;

    Interestingly, we already have been automating a good chunk of AP’s sports agate report for several years. Data comes from STATS, the sports statistics company, and is automated and formatted into our systems for distribution. A majority of our agate is produced this way.

    Reporting sports or financial results makes sense for computer programs; the reciting of facts within a flowing narrative is something basic – Manchester United led Arsenal 2-0  at half time, Exxon Mobil stock was up twenty cents in morning trading and the Japanese Yen was down three points at this afternoon’s close don’t take a super computer to write.

    Cynics would say rewriting press releases, something many journalists are accused of doing, could be better done by a machine and increasingly this is exactly what happens.

    The automation of commodity reporting isn’t just a threat to journeyman journalists though; any job, trade or profession that is based on regurgitating information already stored on a database can be processed the same way.

    For lawyers, accountants and armies of form processing public servants the computers are already threatening jobs – like journalists things are about to get much worse in those fields.

    It could well be that it’s managers who are the most vulnerable of all; when computers can monitor the workplace and prepare executive reports then there’s little reason for many middle management positions.

    This is part of the reason why the middle classes are in trouble and the political forces this unleashes shouldn’t be underestimated.

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  • Dealing with the demographic dividend

    Dealing with the demographic dividend

    “In the 20th century the planet’s population doubled twice. It will not double even once in the current century,” states The Economist in a lengthy article on how the world’s aging population is going to affect economic growth.

    One of the most overlooked aspects of modern day economics is the changing demographics of the developed world, the aging army of baby boomers has been effectively ignored by policy makers and voters alike and now we’re about the see the consequences.

    Japan is the case study as the country is well ahead of the pack with an rapidly aging population and the indicators aren’t good.

    Amlan Roy, an economist at Credit Suisse, has calculated that the shrinking working-age population dragged down Japan’s GDP growth by an average of just over 0.6 percentage points a year between 2000 and 2013, and that over the next four years that will increase to 1 percentage point a year.

    Despite that drag on growth, the Japanese are still living quite well and could be showing that an economy can grow old gracefully and productively.

    The key to doing that is to have a well educated, skilled and productive workforce. An efficient health system that ensures older workers stay fit enough to work doesn’t hurt either.

    What The Economist illustrates in its story is that some countries are going to perform better than others as their workforces age. Those who’ve neglected their education systems and workforce skill bases are not going to do well.

    One can’t help but think the ideologies that gripped the Anglo-Saxon countries in the 1980s that saw skills being discarded, investment neglected and education cut are going to have a high cost on those nations over the next twenty years.

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  • Saving retirement

    Saving retirement

    Retirement age is vexed problem in the developed world; while life expectancy has increased over the last Century, the age where one becomes eligible for the pension has barely changed.

    Harvard University professor Martin Feldstein illustrates this in a post on Project Syndicate, Saving Retirement, where he has a number of suggestions of moving the pension age to ease the pressures on public finances.

    Obviously, retirees deserve advance notice before benefits are reduced. That is why it is important for the US – and for many countries around the world – to act now to make the changes needed to stabilize future pension finances.
    Those pressures are going to become more real in the decade as the baby boomers join the ranks of the retired, the cry “I’ve paid my taxes, where’s my benefits?” is going to get louder.
    Unfortunately for them, the kitty’s going to turn out to be bare – there simply aren’t enough Generation X and Y workers in the developed economies to pay for millions of boomers collecting pensions for the next thirty years.
    Governments around the world have ignored this obvious, and predictable, problem for fifty years and now it’s time to address it. Unfortunately few leaders have the courage to tell their electorates the truth of the challenge ahead.

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  • When entrepreneurship gets old

    When entrepreneurship gets old

    As part of their series on America’s aging population, Bloomberg looks at the story of 61 year old Lee Manchester who lives in a friend’s basement.

    While the Bloomberg story focuses on the contrast between Lee and her father who benefitted from the post World War II economic boom, the real story is Lee’s work history.

    Key to her work history is her setting up a business in 1986, that business failed in the late 1980s recession and Lee ponders what might have been had she not made that investment.

    Lee sometimes can’t help dreaming about the trips she’d be planning if she’d invested the $150,000 she spent to start a construction company.

    This is the downside setting up your own business that those currently peddling the cult of the entrepreneur don’t mention. If the business fails, and many do, then the costs can be high in lost savings and damaged career opportunities. Being an entrepreneur is high risk, hard work.

    We may well find though that more people find themselves launching businesses in their older years as the economic realities of the post baby boom era start to be felt by communities.

    In many respects though Lee is ahead of the curve, the generation behind her have no expectations of a long and affluent retirement, “the government will abolish the pension about two years before I retire” is the common theme among Gen Xer and Ys.

    For GenYs and Xers this attitude is realistic, the demographic sums that worked for Lee’s father are now working against them while the post war economic system that guaranteed Lew Manchester a safe job and company pension ceased to exist in the 1980s.

    Had boomers like Lee been thriftier, they would have still been hurt by a shift to 401(k) accounts from pensions in the 1980s. Thirty-seven percent of the elderly in the U.S. collect pensions, which provide some guaranteed income until they die. Fewer than 10 percent of boomers collect pensions, and that number is quickly shrinking.

    Lew’s generation were the lucky ones, while the boomers – particularly the early boomers born between 1945 and 55 – believe they are entitled to similar benefits as their parents, their reality is going to be a much harder and precarious existence into old age.

    While Lee is paying the price for interrupting her career with a stab at running her own business, in many ways she’s better prepared for a future that is going to require people of all ages to be more entrepreneurial.

    In fact, many of those baby boomers forced to become entrepreneurs may well enjoy it, “launching the business was the most fun I ever had and my way to fight a frightening medical diagnosis” says Lee.

    As the reality of their financial situation dawns upon them, many of Lee’s contemporaries are going to find themselves launching businesses long after the age they thought they were going to settle into a sedate retirement – lets hope they have fun too.

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