Earn Your 20s Money Degree: The New Economy 101
I’m a big believer in continuous learning. In order to get ahead in your career, in your money management and in life, you need to continue honing your skill set and adding to it. Well, this blog is dedicated to help you do that. I’m starting a new series entitled ‘Earn Your 20s Money Degree.’ This series will focus on a variety of topics that I believe we as 20-somethings need to understand if we aim to be successful employees, investors, entrepreneurs, etc.
The first entry in this series is about the New Economy. Because of technology, there are more ways than ever to make money. Also because of technology, it is easier than ever to launch a venture of your own. Let’s take a look at how we got where we are today and also at some ways for you to make some serious money.
Google Jump-Started The New Economy
After the dot-com crash, the future of the internet was unclear. When Google debuted their Adsense service, they solidified the internet as a true medium to do business and in doing so, took the internet to new heights.
Google Adsense is a platform that changed advertising forever. Now, any party no matter how big or small could publish ads and earn money. Furthermore, Google Adsense created a more effective advertising mechanism because it displayed ads according to the content shown on a web page.
Understand that prior to this, the race on the internet was to put up web pages that got huge amounts of traffic, then sell ads for a certain number of impressions (views). Google decided to create the platform that could enable a much better form of advertising instead. This also changed how advertising on the internet is sold; instead of impressions, Adsense publishers are paid by performance (clicks). Because of this, I can now advertise my product or service and only pay when people click-thru to my website. Perfect!
The new economy is about the new opportunities out there for your to take advantage of and make money. Learn from the Google example and turn your attention into focusing on a platform instead of a service or a product. Instead of competing directly with the big boys in a certain industry, think of a platform that can enable all parties in that industry (big or small) to compete better. Google produced the Adsense platform to connect advertisers and publishers in a way like never before. Perhaps, you work in an industry where service providers are connecting with their vendors or their customers in an archaic manner.
Another Example, My Example
This type of focus is exactly what I’m doing for my current company. I am building a software solution (a platform) that helps us out and drives us closer towards an offering that can connect us with our clients and vendors in a seamless fashion like never before. The more seamless the communication and information flow, the less overhead we need, the higher quality our communication, the better our services, the more money we can make. Theoretically, this platform could be sold to other companies like us to ‘enable’ them to work much more efficiently.
In this article on Seeking Alpha, the author writes about The Google Economy and discusses the similar ideas. Check out the section entitled, “Be A Platform” for more information on these ideas. The most interesting quote here is what he says “In this new world, you don’t want to own everything – indeed, if you’re like Google, you want to own as little as possible. Instead you want to enable everything.” In today’s over-leveraged business environment, sounds pretty good to be in a business where capital intensive inventories or equipment are needed.
The Role Of Debt In The New Economy
Does your business idea have a growth strategy where debt is required? Or think about it this way, to go from $500,000 to $5,000,000 in revenue, do you need to add a correlating amount of debt to get there? In the New Economy, this isn’t necessary because platforms are scalable with minimal increases in cost.
Consider the old school big automakers in our country (yes, the ones that are struggling to stay afloat). For them to grow, a new plant must be built and millions poured into equipment and labor. This is the old economy.
The challenge today is for you and me to create the new businesses that will drive this new economy forward in the years ahead. Old manufacturing is dying, no matter what the presidential candidates will tell you. Who knows what our financial system will look like in the future. The New Economy is where abundant opportunities are for today’s 20-somethings.
The beauty is the startup costs involved in creating these New Economy businesses are minimal, especially if you’re thinking software as a platform. If you have some technology skills, you might even be able to get something off the ground single-handedly (if you’re in college, take some computer science courses!).
I challenge you to look at your current job in a new way. Consider the way things are done, the way information flows and the way you communicate with vendors, suppliers, customers, everybody. Think about potential platforms that would enable your company to get to the next level. The New Economy is here and growing. I recommend you join it.