Hiring Less to Make More

Last week I had a call with Andrew Youderian, who I speak with about once a quarter. Since Andrew also runs a community, and we were both in ecommerce, we get on the phone to catch up on business and life. Andrew said something I thought was interesting, which was along the lines of, “we’ve been hearing about how software and technology is going to start replacing jobs for a while, but now I’m actually starting to see it in my businesses.  I’m increasingly using software and SaaS tools for things that VAs, and other contractors, used to be my primary solution for.”

Futurists, technologists and just about everyone in the tech space have been saying as much for years. Back in 2011, Marc Andreesen famously wrote an article titled “Why Software Is Eating The World”, in which he said:

“More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.”

Essentially, the thought is that companies will be lowering their cost structures due to automation through software. And, where humans were once necessary, there will increasingly be software which costs less to produce and maintain. Although Marc may have been referring to large companies back in 2011, I bring this up because it has similar implications for small businesses in the future.

1. There is a possibility that a portion of your team has already been replaced with software.

If you started your company several years ago, a lot has changed. There are now many pieces of software we use that do the jobs previously undertaken by people. That being said, when is the last time you looked around to find new software to run your business? Most employees probably won’t be thinking of ways to replace themselves. The best ones will see this as an opportunity to up-level their skillset into more valuable tasks. Challenge them to replace a portion of their day with software. Show them the cost – and other – benefits to having their tasks automated.

2. Your competition may be growing faster than you with less people

We saw this with our physical product business. While our competition chose to attend trade shows, and maintain a physical storefront, we chose to invest in understanding google and paid traffic because we believed it was the future. We won. Some of them went out of business, and others struggled to find ways to catch up. Because we adopted early to the idea that business wouldn’t be done the same way it had been done in the past, we were able to move faster and increase the gap between ourselves and the competition.

3. Having a large team could be a bad sign

I’m hearing fewer and fewer CEOs bragging about the size of their company. In the past it was impressive to hear things like ‘we have 50 full-time employees’. Now it might be a liability. Software doesn’t take time off for vacation or quit during a big project. Back when the ‘4-Hour Work Week’ was published, Tim Ferriss made it seem as if most tasks could be automated. But, actually, building a company back in 2008, there were still quite a few tasks in our business that needed humans. In 2017, seeing the tools that are available, I’m not sure if that’s still true.

Here is a list of the software we use to run the DC:

Vanilla Forums – Forum software to host the community.
Chargify – Recurring subscription-based payments
Paypal and Braintree – Payment gateways
Zoho – CRM tool to keep track of member details
Drip – Email marketing software to send announcements and the Dispatch (our weekly newsletter for DCers)
Formstack –  Form software for new member applications and mastermind registrations
Ticketbase – Event ticketing software for offline events
Zapier – An incredibly underrated tool that connects various SaaS apps to run another.
Slack – Mainly for internal comms but also an external messaging tool for real-time chatter between DCers at DCBKK.
Ticketbud and Eventbrite – Not currently using, but have used in the past for meetup RSVPs

If software is slowing destroying jobs by the year, Artificial Intelligence may cause mass extinction in a matter of hours.

According to the latest technology and predictors, AI may soon take over the planet and our jobs. And, while in the US, President elect Donald Trump has been campaigning for ‘local manufacturing’, a lot of technologists agree that AI and robots will be the real takers of jobs, not outsourcing.

What can we do about it?

Adapt. It’s unclear if humans will continue to be the backbone of our companies, in the future, the way they have been in the past. And, as with most revolutions, it’s likely that software innovations will lead to changes we can’t currently see or predict. But, in the short term, it seems that having a large staff is not necessarily an advantage – in fact it might well be a real weakness.

Here are a few articles on AI I’ve read recently:

The Great A.I. Awakening

The AI Revolution: The Road to Superintelligence

16 Questions About Self-Driving Cars