It’s Not Time to Look for a Job, It’s Time to Create One

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Change is a constant.

And as things change, in order to position yourself to prosper, you must stay at the forefront of that change.

Our lives within society tend to change incrementally. Yet eventually those small adjustments add up and paradigms shift.

Architects who design public spaces now take Instagram into account. Small towns now campaign and position themselves to attract digital nomads and remote workers.

Two things, Instagram and digital nomads, that didn’t exist 10 years ago but now impact our collective daily experience, not to mention our personal lives.

Economic conditions and institutions have long tended to define the parameters within which we as individuals operate.

And subtly but powerfully, in a Wizard-of-Oz/man-behind-the-curtain sort of way, they narrowed the options (perceived and real) from which we could choose to construct our work and the rest of our lives.

In other words, people haven’t always had the free will they imagined.

For the most part up until recently in history, an individual has existed somewhere between a puppet on a string and a player in a game whose high-level rules and playing pieces were already well-defined.

But now, according to thinkers like Ron Davison, that’s changing.

And it’s changing because we’ve entered into a new economic era, which Davison calls “The Fourth Economy.”

In the new economy, individuals get to define their lives actively, rather than having their lives restricted in advance by a predetermined social definition.

Davison puts it this way:

Up until now, it’s the few who have defined society and the many that have been defined by it…. Think about a world in which this direction is increasingly reversed, a society in which the individual is less social invention than social inventor.

What makes this new direction possible?

Originally technology, but now… entrepreneurship.

While the preceding three economies of our civilization were arranged first around land, then capital, and recently knowledge, this new economy depends on entrepreneurship and the inventions that come with it.

Luckily, if you want to best position yourself to win in this new economy, it’s still early days.

The New Limiter

For thousands of years, land was the great limiter that provided the capacity for wealth. There was a finite amount of it, but seizing it gave you endless opportunities to create value.

That made the feudal lords and ladies possible, and much later the plantations.

Then, during the industrial age and as the stock market took hold, that limiter was capital. Wealth was no longer tied to the land, and you could amass capital without it through industry and investment.

That made the Rockefellers possible.

As we shifted into the age of information, knowledge became a prized possession, and your capacity to create wealth depended largely on knowledge workers, who were in limited supply due to still-limited access to education.

Advances in technology meant that you could now create wealth with the use of knowledge that didn’t depend heavily on capital.

It was a time when a kid with the right knowledge could drop out of school and develop a prototype in his garage that would become the basis of a $500bn industry.

A time when corporate R&D ruled, and startups like Atari were born.

A time that made Microsoft and Apple possible.

Knowledge is vastly accessible now, when online education is ubiquitous and University courses are open access.

And the new limiter, according to Davison, is entrepreneurship.

In essence, the new economy now depends on the capacity to create demand for a product or service – or in startup terms, it depends on arriving at the right product-market fit.

The way land and capital once determined wealth, it will now be determined by your ability to find needs or holes in the market and fill them.

Basically, by your ability to run your company and creatively design your own work/life.

To take advantage of the vast resources, trainings, and information widely available and apply it.

We’re seeing it already, and that shift will continue…value will be created by entrepreneurs.

Which is why now is not the time to get a job, but to create one for yourself.

Embrace Change and Win

What makes this capacity a limiter now?

In a word, inertia.

For the most part we are all creatures of habit who resist change. Qualifying for a job still seems simpler than creating or designing one on our own.

Even as things change, people tend to continue doing things the way they’ve always been done, in life and in business.

For those brave souls among us who can take on the risk that comes with doing things differently and have what it takes to become CEO of our own companies, the future is ready and waiting to be designed by us now.

As cliché as it sounds, it actually is a brave new world, and it’s up to us to make it brighter than the one Aldous Huxley predicted.

Meanwhile, inertia doesn’t just affect us on the individual level, but at the level of our institutions and social arrangements as well.

That’s why huge corporations and entire industries have recently been left completely behind.

The Harvard Business Review reported last year that, “since 2000, 52 percent of companies in the Fortune 500 have either gone bankrupt, been acquired, or ceased to exist as a result of digital disruption.”

In many cases, continuing to operate as a business in ways that had always worked before proved fatal. And now, that same inertia spells major opportunities.

The Shortcut That Few Are Talking About

One of the fastest routes to success as an entrepreneur that brilliantly coincides with the opportunities presented by the “fourth economy,” is acquisition entrepreneurship.

While the world of start-ups and venture capital funding gets all the attention, savvy entrepreneurs are quietly creating massive value in another way.

And much more quickly.

Acquisition entrepreneurship entails finding small-to-medium businesses that already have consistent cash flow and customers and using them as a platform on which to build value.

Why acquire a small business now?

The allure of bootstrapping a startup with the hopes of exiting for eight figures a few years later is understandable.

The stories of those who have done just that, or those who have attained that magical “VC-backed” status for their fledgling ideas, spark big dreams.

But the advantages of buying a business rather than starting one from scratch are many:

  • You have product-market fit from day one.
  • You have existing cash flow to work with.
  • You have an existing team and procedures in place which are already succeeding.
  • You have a business model that’s working.
  • You have current product lines and/or services which you can expand.
  • You have historical financial and customer data on which to base your decisions.

With a startup, on the other hand, you have none of those things. And the odds of any startup making it to product-market fit and surviving it’s first phase are incredibly slim.

That’s not to say that you have to buy the perfect business; it doesn’t exist.

But buying a profitable business immediately provides an infrastructure on which you can build something of your own, and the cash flow to pay for it.

It also provides a training ground on which you can become comfortable and adept at running a successful company.

You’ll learn what improvements need to be made and experiment with making them.

You’ll apply your own skills and past experiences to carve new paths and open new markets.

Add innovative thinking and your own ideas for growing revenue or streamlining operations to a working infrastructure, and you’ll likely have a winning combination.

Isn’t business acquisition impossible unless you’re already wealthy?

Not at all.

In fact, it’s a viable path to build that wealth for many.

For now, money is cheap, so financing an acquisition makes sense.

Combine the fact that you’re buying an asset with cash flow already in place with new SBA lending rules, and you’ll only need to raise 5% of the purchase price in cash.

The rest can be a combination of seller financing and conventional or SBA loans.

How do you find the right business for you?

In the last 10 years, we’ve seen job growth slow in proportion to population growth.

Meanwhile, the market for small businesses continues to expand.

In the first half of 2018 alone, a record 5,383 businesses were sold.

When a well-run thriving business hits the market, it doesn’t stay there long.

The first thing to do is know what you’re looking for and then connect with brokers and advisors who will have the information you need.

While the flood of businesses expected to hit the market from Baby Boomers retiring didn’t happen as quickly as expected, that’s not bad news overall.

Baby boomers still own a huge percentage of small businesses in the US, and that points to a great deal of opportunity still on the horizon.

The challenge is to be ready for the right opportunity when it arises and know it when you see it.

Remember that the key to this fourth economy is entrepreneurship as a limiter.

This means it’s possible to build wealth as an entrepreneur in this environment, but still not so easy everyone’s doing it.

If you decide to take on the challenge, here’s how to set yourself apart from the dreamers and become a doer:

  • Narrow down exactly what type of business you’re looking for.
  • Connect with brokers and other advisors so that when a business that fits your needs comes on the market, you’ll know it.
  • Get your financing in order ahead of time.

The more you learn now about the type of business that best suits your needs, and the best way to evaluate a business as an investment, the better.

If You Want to Succeed, Think Differently

Business will always be risky.

But as Mark Zuckerberg once said, the only guaranteed failure is not taking the risk to begin with.

It’s a well-known fact that to succeed in any type of investing, you have to go against the general consensus of the crowd.

Acquisition entrepreneurship is not the highly-accepted norm when it comes to creating value and building wealth.

Odds are, the flashier world of start-ups will continue to get the most attention, and acquisition will remain out of the mainstream spotlight for now.

Which is why now is the time to get started.

It’s a lot like catching a wave before it crashes down over your head.

The tech giants that now seem to rule the world and increasingly threaten to colonize the web and monopolize opportunity, are those companies that are the most adept at getting out ahead of the waves and riding them.

They’ve embraced the fourth economy fully and adapted to the rise of the individual that has come with it. And they’ve done so at scale.

Companies like Google and Apple have capitalized on the new economy full tilt, but that doesn’t mean smaller companies and individual entrepreneurs can’t do the same.

In fact, it’s being done every day. If you decide to take on this challenge, you’ll be in very good company with some of the brightest minds in the world.

Of course, it’s a lot easier to ride a wave if you have the right board.

Positioning yourself now to recognize the right company when it hits the market, and then to use it as a platform on which to build future value can be an exhilarating ride with a huge pay off.

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For more on acquisition entrepreneurship, check out the book Buy Then Build on Amazon.

Walker Deibel

Walker Deibel

Walker Deibel is an entrepreneur and advisor. He is the author of Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game.