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implications and opportunities for entrepreneurs
free agency and the new economy

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(From video clip)

Executive: Is this all [you have written]?

Rath: That's all.

Executive: But you still got 12 minutes.

Rath: I have written all I think is necessary.

Executive (reading from what Rath has written): “The most significant thing about me, so far as the United Broadcasting Corporation is concerned, is that I am applying for a position in its Public Relations department, and, after a reasonable period of learning, I believe I could do a good job. I would be glad to answer any other questions relevant to this application for employment, but, after giving it serious thought, I am unable to convince myself that any further speculation on my importance could be of any legitimate interest or value to the United Broadcasting Corporation.

Rath: Anything else?

Executive: No. We'll call you when we decide anything.

Rath: Good-bye. Thank you.

He did not get the memo about work as a form of self-expression, obviously, and did not subscribe to Fast Company magazine. He also got the job.

            Can you imagine if you did that exercise today with the people in this room? You give people an hour and I'm sure they would have registered their own name as a domain. Give them two hours and they'll probably have a website up. Three hours, they probably would have filed an S1 to go public. It's just remarkable to think about that, and it tells a lot about the old work ethic and the new work ethic.

            The new work ethic is in an eerily similar scene from the movie Jerry Maguire. Great movie. Nicole Kidman's ex-husband plays a sports agent who wants to play the game a different way. In this scene, very early in the movie, he has a dark night of the soul. He's at a corporate conference in Miami and begins spacing out. He begins hallucinating. He begins pondering what his life is all about. He also has a writing exercise. It's very similar to that clip from The Man in the Gray Flannel Suit. Here is Tom Cruise.

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(From video clip)

Cruise: I couldn't escape one simple thought: I hated myself. No, no, no, here is what it was: I hated my place in the world. I had so much to say and no one to listen. And then it happened. It was the oddest, most unexpected thing. I began writing what they call a mission statement. Not a memo, a mission statement, you know, a suggestion for the future of our company. A night like this doesn't come along very often. I seized it. What started out as one page became 25. Suddenly, I was my father's son again. I was remembering the simple pleasures of this job, how I ended up here out of law school, the way a stadium sounds when one of my players performs well on the field, the way we are meant to protect them in health and in a dream. With so many clients, we had forgotten what was important. I wrote and wrote and wrote and wrote. And I'm not even a writer. I was remembering even the words of the original sports agent, my mentor, the late great Dickey Fox, who said, "The key to this business is personal relationships." Suddenly it was all pretty clear. The answer was fewer clients, less money, more attention, caring for them. Caring for ourselves and games, too. Just starting our lives, really. What I was writing was somewhat touchy-feely. I didn't care. I had lost the ability to bullshit. It was the me I'd always wanted to be. I took it in a bag to the CopyMat in the middle of the night and printed 110 copies. Even the cover looked like The Catcher in the Rye. I entitled it "The Things We Think And Do Not Say: The Future of Our Business."

CopyMat Employee: That's how you become great, man, hang your balls out there.

Cruise: Thanks.

I have in my hands the shooting script of Jerry Maguire. It's just remarkable; the guy is talking about Free Agent Nation. If you go back to the monologue we heard, "I hated my place in the world." He had money, but no meaning.  He said, "I was remembering the simple pleasures of the job." He’s talking about fun. "The key to this is personal relationships." He talks about caring for people. He talks about fewer clients. He talks about less money. He says, "I was 35, I had started my life." Hmm, that personally sounds quite familiar to me. He says, "I had lost the ability to bullshit. I was the me I'd always wanted to be." That is very much like these people who I talked to at Starbucks and in hotel lobbies, saying, "I needed to take off the mask.”

            "Even the cover looks like Catcher in the Rye." I'll give you a magazine if you can answer this literary question. In Catcher in the Rye, what did Holden Caulfield despise more than anything else?

Audience Member: Phonies.

Mr. Pink: We have a multiple prize winner. That's right, phonies. Phonies are the opposite of authenticity. He called it “The Things We Think And Do Not Say,” which is sort of like Peter’s clip from Office Space.

            Anyway, I want to read the stage directions here after that last line of the clip we saw. It says, "Jerry nods. This guy sounds and looks like a prophet. In fact, everyone in Kinko's at 3 a.m. does." Truer words were never spoken.

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free agent opportunities

            I'm going to take two more minutes to make one more point. I promised you some of these business ideas, and I'll sweeten the pot a little bit by giving away one more prize. Here is a question: What business is Starbucks in?

Audience Member: Real estate.

Mr. Pink: I want to tell you about Starbucks. I did huge numbers of these interviews at Starbucks, more than any other place. Why? Well, for the price of coffee I could sit there for several hours. In fact, some days, I would do interviews in two different ways. One I call traveling salesman mode, the other I call dentist mode. In traveling salesman mode, I would get in my car and go from place to place knocking on doors. "Hello, Mrs. Jones, would you like to talk about the deeper meaning of work for two hours?" Then I’d go off to the next place. The other way I did it was in dentist mode, where I would schedule appointments. Fred comes in at 9:30; Judy comes in at 11:30; Sally comes in at 1:30. I would station myself, in many, many cases at Starbucks, and sit there the entire day as people came in for their appointments.

            Do you think the Starbucks people got angry at me and tried to kick me out? No. Let me tell you something else. I've had Starbucks baristas (that’s what they call the people who work there) take phone messages for me in Minneapolis, Minnesota; in Glenview, Illinois; in Foster City, California; in Manhattan. That's kind of interesting.

            Starbucks is not in the hot beverage business; it is in the commercial real estate business. You go around today, downtown and especially in some of the outer areas, and there are people in Starbucks all day with laptops, holding meetings and so forth.

            Starbucks is in the commercial real estate business. So who cares? Who cares about that? Well, you ought to care about that if you're a fledgling entrepreneur, because what has emerged in the free agent economy is what I call the “free agent infrastructure.” It's a physical platform on which free agents can do their work. You don't have all the services of a big corporation; you don't have a supply closet; you don't have an MIS department; but a whole series of private establishments have emerged in a totally self-organized way. Woven together, they form an infrastructure for getting people to do their work. You have Kinko's, the Cheers bar of Free Agent Nation where everybody knows your name and they're always glad you came. You have postal centers, like Mailboxes, Etc., which are the mail rooms of Free Agent Nation. You have office supply superstores like Staples, the supply closets of Free Agent Nation. You have Barnes & Noble and the big chain bookstores, the public libraries of Free Agent Nation.

            You have a booming business in executive suites. There is actually a great company down here in Washington, DC, called Executive Office Clubs. They rent work stations for nine bucks an hour, private offices for 12 bucks an hour. They also offer free Starbucks coffee. Think about that. At Starbucks, you buy the coffee and get the office for free; at this place you buy the office and get the coffee for free. They're in the same business with just slightly different business models. It is a gigantic, billion-dollar industry.

            Let's go back to Starbucks for a second. The last two big deals that Starbucks has done, who were they with? Do you think they were with Smuckers to get a new brand of jam in there? Or with Sara Lee to get a new kind of pastry? No. The two biggest deals that Starbucks has just done in the last few months are with Compaq Computer and Microsoft. What are they doing? They're putting wireless Internet connections in one thousand Starbucks locations. They know they're in the commercial real estate business. In fact, they redesigned their stores. Remember the very thin countertops, the very uncomfortable chairs that were kind of done to shuffle people out. There’s been a total redesign of the interior architecture and interior design--big comfy chairs facing each other, big tables--Starbucks knows what business they're in.

            Here is another company that knows what business it's in. There is one in Seattle and one in San Francisco. Here is a menu from a place called Circadia, a lovely menu. This place is a lovely little place. It has tables and chairs. Each table has a phone with a data port. I'll read you some of the things from the menu: caramel mocha, Tazo tea, smoked salmon something or other, breakfast focaccia plate, eggplant something sandwich. They have beer. They have a wine list. They have spirited coffee and hot coffee drinks. They have cool and refreshing cocktails. Oh, wait a second, look at this last page here, they have The Green Room, a private room that you may book for meetings. The room seats 10 and provides a media wall showcasing the latest technology from Gateway. They have a live Internet connection and a big conference table in this room for $50 an hour off the main floor. You can rent laptop computers there. You can buy floppy disks there. They have an Internet kiosk there. Guess who owns Circadia?

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Audience member: Starbucks.

Mr. Pink: Exactly. Smart companies are realizing what’s going on. I'll give you another example, Staples. The whole office supply industry is like this. Staples made an announcement, a tragic announcement a couple weeks ago. Next year they're only going to open 100 new superstores. If you have been to a Staples, you know that it is not like a little mom & pop storefront, it's like 20,000 square feet of retail space. Who do you think is buying at Staples products? Do you think Steve Case at AOL and Bill Gates are running to Staples to get some paper clips? Do you think that people in companies are doing that? No. Staples is serving free agents.

            I think that there are just gigantic opportunities for businesses to serve this space, and most people don't know how to do it well. Most people, with the exception of Starbucks and Kinko's and, I think, to a large extent Apple Computer, don't really understand the psychology of who these people are and why they work this way.

            I'll throw out a whole bunch of business ideas. I write a column for the Online Wall Street Journal, called "The Idea File" where I take an idea for a business and run it through its paces. They’re usually really bad ideas, but you can learn something about business. Although one reader emailed me and had this idea. He said, "I’ve got this great idea. I call it Mutts.com. You use the Internet to breed dogs."

            Here’s a business idea: talent agencies. In the staffing industry, most of the intermediaries represent the buyer of talent. Relatively few represent the seller of talent. Today, 5% of workers who earn over $75,000 are represented by a talent agent, and more and more workers are going to do that. It's sort of a William Morris or ICM for free agents and is a possibly huge business.

            Here’s another. Who is going to fix these computers? I work for myself on the third floor of my house. I am my own MIS department. Who is going to fix my computer? If something goes wrong, if Windows crashes again, what do I do? Is swearing going to fix it? No. Do I have some kind of endemic problem? I don't know. I don't really know what I'm doing. At the same time, you have all of these teenagers who are absolutely expert in computers for whom it's second nature. Why not organize a brigade of teenage techno types to service the computers of home office workers? There are something like 20 million Americans working at home and 19 million of them use computers.  

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            Insurance is a big pain in the neck for free agents. I have to buy health insurance and disability insurance on the open market. I have to redo my homeowners' insurance. It's a huge hassle. If there were a one-stop shop or a portal for free agent insurance, I think it would be enormously lucrative because people are terrified about insurance and they don't want to deal with the hassle of it.

            I think there are a lot of interesting ideas for real estate. One of them actually just appeared in Washington, DC. I had this notion in my book, what I called “a free agent’s Elks Lodge,” which is a new kind of office where free agents can go to congregate. Well, there is a very interesting company here with offices in Adams Morgan called The Affinity Lab. It's not an incubator and it's not an executive office suite, it's somewhere in between. I think that there are going to be a lot of real estate ventures. Basically, you rent a desk and you are part of a common community and you get some common office services. There are a couple of these now in San Francisco and there is a new one in New York. They’re the sort of thing to help people overcome isolation and provide some business services. I think it is going to be a huge business.

            Here is a product that I can't believe is not on the market, so please do it. Nobody knows how to become a free agent, they only sort of know. I can envision a “Free Agent Starter Kit,” a box you buy at Staples or Kinko's or wherever. It includes certain forms you need, certain online things you need, certain software you need, checklists of what you should do before you make the leap, lists of groups and a copy of my book. I think people would pay $40 or $50 for it. I think that would be an amazing thing.

            I'll give you one last idea. If anybody starts this company, I want to know about it. This is the most outlandish idea. We are 10, 15, 20 years away from a huge labor shortage. You have the baby boomers retiring, and behind them the demographic cohort is much, much smaller. The working age population is actually going to stop growing here in the United States. That is why I think that a lot of baby boomers are going to be called out of retirement, partly because they're not going to want to spend 30 years playing canasta and people are living so much longer. They'll come back working as free agents, part-time, sometime, any time free agents. The problem, though, is worse in western Europe, particularly in Italy, so here is the idea: a combination temp agency/travel agency. (Laughter)

            I'm serious. You get an Italian company who has nobody to do the work and you bring in these very healthy, very talented 65-year-olds. You give them a trip to Italy as compensation and they do some work for the company. It's not that outlandish of an idea and a short step from courier services where you basically get compensated for your service with the ticket. I'm telling you, talk to me in 2015. Somebody will start a temp agency/travel agency.

            There are a lot more ideas to talk about, but I will not do it right now. I have talked to you enough. Thank you for your time.

Ms. MacPherson: Thank you very much, Dan. We appreciate it. Thanks, everyone, for coming and we'll see you next month.

Page four of four | END

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