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It's Harder to Make a Living Now Than Before the Rise of Online Businesses


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My personal experience with the world wide web mirrors exactly what Rushkoff is saying in this video. If good to hear that he is hopeful about the long term prospects for the web, for the the same reasons that I am.  This video and the commentary below is from the Big Think website.

9781617230172.jpg“It's harder for most people to making a living now than it was before the rise of online businesses like Facebook and Amazon. That's because the digital economy is hurting the real economy, says media theorist Douglas Rushkoff. Competition is increasingly fierce in just about every industry, and digital technologies have allowed companies to pursue monopolies like never before — because they chase the entire world's population as a customer base.

Businesses have always sought growth, but applying the growth mindset to digital technology wields some very disturbing results. Take Twitter for instance: as a company, it makes $500 billion each quarter, but market observers have questioned the company's value because it doesn't have a growth strategy. Compare that to Amazon or Facebook or Google, each of which span multiple industries and have grown rapidly over the last decade.

Interestingly, for all our fascination with businesses owned by shareholders, family businesses perform better in just about every metric. The reason, says Rushkoff, is that family businesses are more concerned for the future — the long term future, not just next quarter. Rushkoff explains more surprising facts about our digital economy in his book, Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity.”

This net video 

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A lot of common sense information here for those of us who are actively working to increase traffic and sales on our sites.Disruption is a good thing if you can figure out how to disrupt. That is the issue. How do you figure out the angle to attack the market and gain market share? That's the constant question for every person looking to increase revenue, how do I grow and add value is your question? His point is that the internet is not interested in adding value, but that is changing. Honestly I don't think it ever changed. People who only want money are going to only care about getting money without regard to bringing value. Those of us who care about adding value will try to add value. 

This is a talk about public and private biz and everyone is aware of the differences in these paths.

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I saw the video.

All that talk about the history of credit and currency, it looked like a clip from "Loose Change".
I was waiting for him to talk about the World Trade Center and building 7....lol.

There is some truth to the claim that giants like Facebook are sucking up too oxygen because so many Black people have abandoned their own private business and social websites just to sign up with Facebook...it's shameful.

But I don't think it's the internet that's creating the BIGGEST problems for small businesses.
The biggest problem is the OVER REGULATION that comes from the federal, state, and local levels.

And this is coming from a LIBERAL...lol.

Most people are turning to Amazon, eBay, and even Craigslist to push their products because it's easier and cheaper to trade on-line than to open up a 4 walled brick and mortar establishment.
Not only can they avoid the constant property inspections from local and state authorities, or avoid paperwork that can be damn near as thick as a phone book, but you cut down on the amount of employees who thanks to more government (all 3 levels) regulation often become harder and harder to keep anyway.

I remember being in Time Square a few years back and saw so many talented brothers...Black men who could take a piece of crayon or charcoal and draw your picture in 3 or 4 minutes on a sheet of cardboard and were only getting $5 or $10 and had to do it quick and run off before the police caught up with them because apparently it was illegal.
It made me so angry that in a nation that prides itself on economic freedom,  something as simple and benign as drawing a picture for a few bucks on the street has now become illegal.


Take away the excessive dictatorial regulation that tends to frighten people away and over burden those brave enough to take on the challenge of entrepreneurship
....and I gurantee you that businesses will flourish.

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Of course corporate greed is nothing new.  Corporations will pursue profits over anything else including human suffering.  What struck a chord with me is that I watched the WWW transition from a platform where people were able to exchange value directly with each other and reap the financial benefits of these exchanges; to a platform where only the biggest corporations now control the exchange of value between people and only those corporations reap all the benefits.

So today, it truly is harder to make a living.  

For example, will the economy be better off, in the long run, in the world of Uber?  What are we gaining in exchange for what we are giving up?   Will the pressure for an Uber to show constant growth result in drivers making more money or less?

Of course regulation is an big issue as companies like Amazon operate in an environment that small business do not, including exploiting tax loopholes facilitated by their Washington lobbyists and ownership of the Washington Post, all the while funded by the capital markets fuel by Wall Street.  Are we collectively better off with an Amazon?

Chiraq was the first release from Amazon's movie division. 
Da Sweet Blood of Jesus (which didn't even make Sara's list) raised $1.5M on Kickstarter and did nothing at the box office

Are we getting better movies as result of Kickstarter or Amazon?

Again, the goal is not better movies but money Kickstarters got paid, Amazon got paid. Spike got paid, what do we get?

I dunno....  

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I like Uber. This weekend I used Lyft and Uber for the first time and it was incredible. The people driving all had different stories. One of the drivers owned Buffalo Wild Wings in another state before being forced to sell them. Another was fired from his truck driving job because a family member was hired. Another bought a limo styled SUV and has plans to purchase a fleet of SUVs and hire his own drivers. He has a limo service as well. Another driver was a lady who drives full time and makes enough to provide for her family. Uber/Lyft is a disruptive force that I don't think will fracture the car market as much as people think. Cars are individual sources of pride and status for people. What Uber/Lyft has done is completely disrupt the service industry as it relates to local travel and actually generated business opportunities. Will it get saturated? Yes of course it will, but anything worth doing as a biz will get overdone.

Everything can't be regulated. It just can't. Eventually those people who use crowdfunding find themselves unable to actually sell product once the campaign is over and they have to learn how to sell. As much as I want to move away from Amazon and only sell on my platform, the bottom line is you have to be where people are buying unless you have six figures set aside to be patient enough to allow your platform to grow. It's a double edged sword. Every person has to learn how to hold the handle/hilt so they can swing the sword and cut the fruit that will feed them.

Crowdfunding is great when it is used the right way. Spike Lee wasted the platform and pimped the system. But smaller people with vision have created some solid projects. In the shoe field I've seen a company like Inkkas have to be rescued although they ran 4 Kickstarters bringing in 200K. They ended up on Marcus Lemonis' The Profit. Why? because they used kickstarter to sell and there is an extreme danger in this that eventually catches up with the company, but in the short time people do win without providing a service at all. Another shoe company Three over Seven raised 100K in 5 days. Overshadowing my own campaign, and then failed miserably at delivering the shoes, but they parlayed that into an investment of 2.7 million and changed the name to Allbirds. These are shoe examples, but I've backed about 7 projects in different fields and it worked pretty well. Some really good projects failed though and that is disappointing.

Anyway, I'm starting to find that there are ways to utilize the structures in place. I've even come to realize that I've been wrong about my approach to Facebook. What I've found is that Facebook sucks for items that are created and don't have any social connection to people. I make a shoe or a book, or any manufactured item, and I don't have a following, If I use Facebook nothing is going to happen because there isn't social or emotional equity in those items. However, a song, or speech, or picture has inherent social and emotional equity built in because people respond to those things that connect with them. One of the guys I built a site for has parlayed his Facebook videos into growth for his YouTube and has extended his reach so now his band is touring and he has a lot of followers, but music is social. I ran a video ad of a speech this past week and saw a small increase in my YouTube, but I also sold 5 downloads of books and a couple of paperbacks. I also sold about 5 pair of shoes. The video resonated just like I thought it would and allows for the building of a brand. There has to be a constant stream of cash going out, but I have yet to hit 150 dollars advertising but the five shoes and books was a wash and more important I have been able to dialogue with the people sharing the video.

I still drive traffic to my website with articles, but the way to work in this new internet system is to study it and create and then try different tactics. It's a full time job.

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When I was in Chicago a few weeks ago I used Uber for the first time; it was actually the only way I got around in the 36 hours I was in the city. I must have taken 6 Uber rides.  The experience was definitely positive, and the entire transaction was handled via my cell phone.

But again the devil's in the details.  I spoke to one driver who works 6 days a weeks and drives 12 hours a day, to make a living.  I'm not sure people understand how difficult that is to do.  I was in the car about 25 minutes (southside to the convention center and the ride cost just under $10.  When you factor in Uber's cut, gas, wear and tear on the car, taxes, bottled water, whatever, the hourly wage is not very good particularly when you factor in the work required.

Of course the riders are happy; they are getting cheap, convenient transportation.  Of course the owner of Uber is happy, he is a multi-billionaire.  Again, these companies are exploitative.  Sure they are providing needed services or optimizing and old ones, but the problem, as discussed in the video, is the pressure for these companies to show growth.

The result is increased downward pressure in driver revenue.  But again as long as the passengers and investors are happy workers will continue to be exploited.  Competition from Lyft only increases this pressure.

@CDBurns, as a result it will be much more difficult for anyone to operate their own car services in the world of Uber/Lyft.  

Again the optimization would benefit us more if it were peer- to-peer rather than controlled by a single entity hell-bent on making an ever increasing amount of money.

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Okay, your opinion is of your experience. When I got into the car with my riders I was looking at it from a business perspective so I asked questions so I wouldn't make assumptions. Uber sucks and on average all of my drivers who were signed up with both admitted this. Uber is already losing ground to Lyft. Of the multiple rides we took in Vegas 30% of the drivers were utilizing the car rental service provided by Lyft. This means they got unlimited miles on their rental to drive for Lyft. The cost of the rental was 100 a week. In one day one of the ladies explained that she made that in fares already so everything else was profit. I think when you analyze it with only part of the narrative you come to the conclusion that it will inevitably be bad. The truck driver who drives full time actually uses the rental to travel when he isn't driving for Lyft. Think about that... The guy is renting a car for 100 a week. On a good day he can pull down 250 dollars. On a bad day he may only earn 50. Even at 50 per day over 6 days he's at 300 per week and most of the rentals get 35-40 miles per gallon which means he's probably filling up at 30 bucks twice a week. It's not a bad investment for him. As I said I asked every driver and they all came from different walks of life and they all liked the job except one lady who was new to it and not making much.

Your analysis is not what I see. If the company is giving you a great deal to use a rental and you are doing this as your full time job in a city like Vegas it makes sense and it works.

Your hope that we will become peer to peer is admirable. I am over that idea. Would I like for this to be the case? Of course, but I'm a realist. I know that convenience overrides conscience consumerism (this is something that I'm working on a book about). In a world where we could have more peer to peer interaction you are still going to have to pay someone to drive the traffic to any venture. The difference between Uber/Lyft and Twitter/Tumblr is that Uber/Lyft were built on platforms where they charged money from day one. Twitter and other Internet companies like what this guy is talking about have to figure out how to monetize their businesses although they have a ridiculous amount of monthly users. A lot of these internet companies start and don't have any way to monetize. They simply want the Monthly Users. A prime example in the sneaker world is a company called StockX. The founder worked at twitter. He ran a site called Campless and this site gave everyone info on how much shoes were selling in the resell market. The founder Josh Luber even earned a Ted Talk. He then parlayed Campless into a deal that was invested into by Dan Gilbert owner of the Cleveland Cavaliers. Now Campless didn't have a monetization plan. When he got the investment he based on trying to take his monthly users and have them sell on his platform StockX. He thought the fact that everyone used Campless that they would place their shoes for sell on StockX and he could earn his consignment fees. What I've noticed is that he's been advertising like crazy. Using Google Ads, Facebook Ads, submitting multiple stories to blogs, connecting with influencers like the rapper Wale, Eminem, singer ne-Yo and I'm sure these endorsements don't come cheap; to get people to use the service. What he failed to realize is that people are already selling on Amazon and eBay and that they will always opt for convenience over potential. Now that he's taken money he's going to have to either raise more money or get the platform to be profitable. Like your guy in the video said he no longer has time to build a quality product. Uber/Lyft was built on a pay service. I don't think it's the same analysis.

I think my half full approach allows me to see the benefits. My half full approach is also allowing me to look at every business as a potential study on how to monetize the creation of ideas. I look for the way to capitalize both within and outside of the parameters of the machine. Would I love peer to peer in everything I do? Do I think it would benefit people more? Definitely... but unless people have the patience and money to go slow, it's just not going to happen.

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Man you should know me better that this by now :-) I related my personal experience, as you did, primarily to show that I understand the appeal from the rider's perspective. But trust I was wearing my MBA/Entrepreneur hat when looking at Uber's business model.  Also keep in mind asking a bunch of drivers question is not much better than our experiences, they are just more anecdotes.

We can also make different assumption of the expenses (for example, I would argue most cars would not get 40 miles per gallon in city driving).  The fundamental question I'm really asking/ however; is society better off with Uber/Lyft, with the previous model or something else (true peer to peer)?  Again we both attest to the benefits from the rider's perspective.  But is that trade off worth the resulting negatives to society?

Again, if white women can get dresses that cost less because enslaved Africans are picking the cotton is society better off?

Chris you should check out The Harvard Business review of how Uber managers drivers, you might be surprised by certain aspects of the how the business actually works.  This is one of the reasons asking drivers what they think, though interesting, is not very valuable in understanding Uber's model--the primary reason is that the driver may simply be ignorant of these issues or not sophisticated to appreciate them.

Man peer to peer model is realistic, is in use today, and I believe the future.  ebay, for example, it is doing very well; this is just is not resulting in the fantastic numbers that makes headlines. 

Closer to home, the digital revolution has made it possible for more Black people to publish books, but Amazon's model, which dominates the Black book ecosystem, is all about "extraction," revenue generation.  So despite the plethora of Black books Amazon is not helping in the process of getting the best books to the readers most likely to enjoy them.  

This opens up opportunities for other businesses to reap financial reward by compensating for Amazon's deficiencies.  Of course Amazon will do everything in their power to crush any competition, but they can't succeed, because at the end of the day, you'll make a little less money when you are unwilling to exploit people and that is a tradeoff facebook, Amazon and Uber are unwilling to make--despite what the billionaires who own these companies say.  The actions of their companies reveal the truth.

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Note, I said Uber sucks and I explained that most of the drives I took were Lyft which has a much better model and has already improved on where Uber failed. Most of those drivers had switched from Uber to Lyft. I used Uber in Memphis because more people are signed up here.

Research is simply a person asking questions and documenting so my asking questions, although on a small scale, is just as valuable as any report written by someone analyzing the business aspects because all research can be skewed and should be taken with a grain of salt. We have to listen to research though because most of us don't want to take the time to do our own analysis.

When you say Peer to peer you include eBay? That has thrown me for a loss. I don't consider eBay peer to peer. eBay is the same as Amazon so that creates a flawed discussion point in my view. But that makes me realize that when we both started discussing this we failed to layout what Peer to Peer means in relation to the original discussion of the first post.

My thought of peer to peer is when people are able to visit farmer's markets or use their own platforms to sell to people,no middle man.

Here are some of my thoughts on eBay and Amazon:

I will give you my own example of peer to peer that makes sense. I have a hedge fund. I researched how to start one and launched it through ARCH. I had 3 investors at 10,000 a pop. One person received a 900 dollar return in one month and pulled out. One person received a 1600 dollar return on his 10K in 5 months, and the current investor will get a 10% return over a 3 year period. This is peer to peer because there wasn't a middle man in between my investor and me. http://www.arch-usa.com/arch-investment/

If you are considering eBay a better option over Amazon I call into question every argument you've made. They are the same. The only difference is that Amazon has entered a space that you are very sensitive about in books and you've seen it directly affect this area. eBay has transitioned into a replica of Amazon. It simply hasn't chosen to enter the book industry, but Amazon started in books and made a natural progression in business growth. eBay takes 13% of every sale. Amazon takes 10-15% depending on category. Amazon has Amazon payments and eBay has Paypal. They both take monthly fees for professional accounts. They both have the right terminate you for any reason they choose. They are essentially working in the same areas. Paypal is better because Amazon came along after and copied the platform so no one really uses it.

A true peer to peer won't happen and won't exist. There will have to be advertisements paid to get people to your product. The same money that you spend to get people to your product could possibly cost more in customer acquisition than using Amazon or eBay so as it stands it makes sense to build your platform through these companies to avoid having to pay for the advertisement expenses, but it goes both ways. If you can create content that drives traffic to your site you can win, but you have to have a Huffpost level of content from high profile people or a ton of info that the people are interested in and searching for.

Once again I agree that peer to peer is the way to go, but if you watch the video I explain it as best as I can using the destination vs foot traffic theory the person who has a product, books, shoes, shirts, electronics will have to pay to acquire customers. If I can give Amazon or eBay 13-15% and I don't have to think about customer acquisition I'm going to take the easiest route.When Rushkoff says we are being used, he's right. We are being used, but after ten plus years I have finally conceded and I take the easiest path while still adjusting and trying to deliver straight to people. You know like I do how hard this is. But my small sample size for Lyft gives a different story. 

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Gimme a few to watch the video and reply.  

I really don't know enough about how Lyft works to speak to them specifically outside of the of the fact they are not peer to peer which, on that basis, makes them similar to Uber.

What distinguishes ebay from Amazon is that Amazon is the seller and their goal is to sell everything.  ebay provides an effective platform for people to sell directly to other people (peer-to-peer).  Sure Amazon also offer their marketplace, but this is not their focus and may simply be offered as a way to keep the ebays of the world from growing or even launching (again the real problem with monopolies).

If you are saying that ebay is now selling things directly that way amazon does (storing, shipping, manufacturing products), then you are telling me something I was not aware of.  Also, ebay and paypal are two separate different companies.  

As an aside: I'm really liking Square much better than PayPal and am transitioning the new site to use Square exclusively.

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Lyft has capitalized on all of the shortcomings of Uber and the drivers are better for it. This is why asking a ton of questions does matter just as much as looking at some research about the owners. The car rental service, the extra benefits, the protection of the driver, Lyft improved on Uber which is what business is all about. Does it still benefit the billionaires? Of course! as it should... they created it.

I could walk out the door of my house tomorrow and start Chris' ride share in Memphis. I would have to advertise to get people to log on and sign up and then I would have to build an online platform to documents mileage and credit card processing. Or I could do it the old school way like a Taxi and do a meter... the bottom line is you are talking about this peer to peer thing for transportation as if it is going to be something as simple as asking your neighbor for a ride. (I know you aren't that simple, but they way you bring up peer to peer it seems like you are saying this). I guess if you could lay out a peer to peer platform for individuals and ride sharing then I can better understand you.

Paypal's separation from eBay last year was topical. If it was a genuine separation then you would be able to accept Stripe, Square, Amazon Payments or other payments through eBay... as it stands you can't. You must have a Paypal to have an eBay.

The only true peer to pee platform online is craigslist. That's it. How you see eBay as peer to peer is surprising. This doesn't mean that I don't think it's a viable business idea. In every book I write about business I list eBay and Paypal as a great option for launching a small biz, but they are not peer to peer. If any company takes 10-13% of your profit they aren't peer to peer. As a matter of fact the same way Amazon has distribution centers across America, eBay is building a FBA (Fulfillment by Amazon) type of delivery where they now warehouse your goods. More important are the exclusive arrangements on eBay that prevent you or anyone from selling specific brands. You can't sell Coach for instance on eBay because of a back end deal that eBay made with Coach. Why is this important? Because if it was peer to peer anything you purchase and want to flip you should be able to sell on eBay, but this isn't the case. 

I like Square, but unless you sell a service, like you do with ads and services on AALBC, and not a product, Square still requires you to do a serious amount of advertisement to generate traffic to your site or your Square store. If you are only using it to process payments the differences between Square and Paypal are negligible outside of the fact that you can get your money the next day with Square (which is actually pretty important). Selling a service is a completely different monster than selling a product. Peer to peer is possible when selling a service. Now if you really wanted to make a point about Amazon being bad for business, then you should know that Amazon is actually allowing you to sell a service on Amazon Home Services which is in direct competition with Angie's List. Will Amazon trump Angie's List... maybe. Will this be bad? of course, but this is all hypothetical as Amazon has tried to upend Etsy and their handmade products but the results have been shitty on their new platform Amazon Handmade.

The Marketplace is huge for Amazon although having their own fulfillment centers allows them to compete for the Buybox on particular items is big, it isn't any different from the exclusive deals eBay has with brands. It's the same thing especially now that eBay has fulfillment centers. 

I have to think your problem with Amazon is personal and not about business or how it affects the market overall.I don't know how you can blame Amazon for doing what a company is supposed to do when it is publicly traded. It isn't any different from what Nike is doing to Sports Authority and all of these big box shoe stores closing.Amazon and Nike are taking advantage of brand loyalty and consumers who value convenience over service. 

I know it seems like blaming the consumer and you hate blaming the victim, but honestly you have to start looking at the consumer. Because the small biz person simply doesn't have the money or time to persuade buyers to shop with them and people aren't networking to help each other.

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