In my post yesterday, I said that small businesses become a zero sum game and if the owner wants to make a tidy profit he has to exploit and out smart his smartest employees. This is a cat and mouse game. The Cat (owner) may eat many mouses but eventually he will run out of steam i.e the younger employees will have a new skill-sets which the older owner is not able to keep up with.
So how do small businesses over come this structural issue
I think small business have this basic structural issue, where either the owner wins or the employer wins. If the owner wins, the business stays afloat for a longer time, but eventually this structural issue with eat up the small business like termites dig into walls.
Naval Ravikant I think says that in future, every person would be a one man business.
With the advent of AI, most of the corporation who can use this expensive tech, will start reducing their manpower. This means the current peak levels of employment will not be sustainable. Corporations are built to maximise profit, if a AI can do the job, corporation will cut the work force.
But governments are supposed to manage the people. If unemployment reaches beyond a certain point and if there is wide spread discontent, the stability of the country is at stake.
New phrases like “ Gig economy and Co-working space” are the already an industry on its own. This is an indicator that people will be doing a lot of stuff like a small business or perhaps a one man small business.
Small Business should turn all its employees into a one man small business to make it a win-win situation
People are driven by incentives. The more skin in the game one has the more he is in the game. In the traditional small business set up, the employee is treated like a disposable commodity. If he works his arse off, he is building the owner of the small business brands. So he doesn’t have any skin in the game.
Now, If a small business can subcontract all its operation/marketing/sales/service to other one man or smaller units of small business this could mean all stake holder have skin in the game. The subcontractors are owners of their businesses, and whatever they learn servicing their existing clientele can be transferred to a new client.
If you are small business and feel you have grown to a point where it is getting extremely tiring for you to carry on. Do try this system and let me know 🙂