A new path is emerging
The data is clear - self-employment rates are rising across the globe. In British Columbia, self-employed individuals now make up 18% of the work-force (up from 13% in the years prior). Thanks to the gig-economy, it's estimated that 30% of Americans are now self-employed.
But this whole self-employment thing is new for a lot of people, including myself. There's a lot of hype around the #entrepreneur lifestyle which can create a misunderstanding (and skepticism) of what self-employment actually means.
With all this hype about gig, passion and creator economies, does it still make sense to pursue a traditional 9-5 career? Or should you bet it all on that crazy app idea you had in college and finally bring it to market?
Employment vs. Self-Employment
I wanted to provide an honest comparison between the two major paths available to most people right now: employment vs. self-employment. I'm going to drill down into a few key areas including:
- 🪨 Stability
- 💰 Money
- 🌎 Freedom
- 💜 Fulfillment
Throughout this article I'm going to be making some generalizations; there are exceptions for every rule. For every successful entrepreneur, there's 5 who aren't. Just like for every fulfilled employee, there's another 5 who aren't. And since whole self-employment thing is a relatively new area for a lot of people, I also wanted to remain as subjective as possible. Hopefully this achieves that goal.
Let's talk about traditional employment.
The benefits of being an employee.
There are a lot of perks to being a full-time employee. It's generally considered to be the safest route and there's a seemingly endless supply of job postings out there.
- ✅ Stability. You don't have to guess how much (or how little) you'll make each month. Even if business is slow, your paycheque arrives on schedule. You know where you have to be each day and roughly what tasks you have to do.
- ✅ Limited responsibility. If the business fails, you're not personally liable. You don't have to worry about making ends meet and putting food on the table for your employees. You don't have to worry about pissing-off investors. You're generally safe, even in the event of a lawsuit or a takeover.
- ✅ Collaboration. Get to work with great people and managers to accomplish tasks that are bigger than just yourself.
- ✅ Pay & Benefits. Tech jobs in particular have phenomenal perks and benefits. Working in areas like health/tech/energy can net 6-figure salaries.
✅ Get paid to learn & grow. You can further develop yourself in your career as you go, often with professional development incentives.
There's a reason that most people will stay on this path for the rest of their careers. You get to enjoy a sizeable reward with very minimal risk. It's basically a win/win scenario.
Convincing them to leave their jobs and dive head-first into the unknown is like trying to convince them to trade their Mercedes for a BMW that isn't guaranteed to run. It's just not worth the risk of leaving what they've built over the lifetime of their career.
The downsides of being an employee.
However, there are pros and cons to everything. While the risks of being employed are generally low, there are certain drawbacks to be aware of. Some of the most common include:
- ❌ Limited pay. Your pay is dictated by your company and industry rates.
- ❌ Job security. Layoffs can happen without notice for a myriad of reasons.
- ❌ Competitive. Starting positions sometimes require ridiculous experience .
- ❌ Rigidity. Employees generally work 40 hours/week from a set-location.
- ❌ Projects. You have work on things that benefit the org, even if it bores you.
- ❌ Meetings & Slack. With a big team it can be difficult to do deep work.
- ❌ Stress. High-achievers are prone to burnout in a corporate environment.
- ❌ Hiring Process. Resumes, unrealistic qualifications and interviews 👎
There are other things to be aware of, too. Like racial and gender pay gaps, toxic workplace culture, shitty managers and male-dominated senior leadership teams. There's mental toll to be had working for narcissistic CEO's that orchestrate the firing of +20 people then fly their private helicopter to Whistler while bragging about it on social media.
However there are forward thinking companies out there that are facing some of these issues head on. I've also met some amazingly awesome CEO's in my time (looking at you, Rick Perrault and Rand Fishkin).
There's nothing wrong with having a great job at a company you love. If you're genuinely happy in your career, love your work, enjoy the perks and stability and don't feel limited by your salary there might not be a reason to look elsewhere.
However - if you're a part of the 85% of people who are reportedly unhappy in their jobs, it might be worth exploring an alternative path that better suits your lifestyle. Let's take a look at the other side.
Let's talk about self-employment 👨💻
Over the last 10 years, advances in technology have fundamentally changed the way humans operate. These days you don't need a team of marketers and developers to bring your idea to market. All you need is an idea and a willingness to get your hands dirty.
Thanks to the internet, it's never been easier to start your own thing.
A new wave of apps, tools and resources exist to empower anyone to build a career around their interests and hobbies. And resources like YouTube and Udemy give access to free/cheap education that will teach you how to do it.
And this is exactly how I did it. I'm not an inherently technical person. I spent my career in customer success, community management with a smidge of marketing thrown in. I learned everything business related online. And by learning apps like Webflow, Zapier, Honeybook and Ghost, I was able to build my creative businesses which eventually paved the way for me to go full-time.
The reality is that in 2021 anyone can start their own business. But just because you can doesn't mean you should. We'll cover the pros and cons of self-employment in detail below.
The benefits of being self-employed.
When someone makes the decision to make the leap into entrepreneurship, it's usually because they're seeking more from one of the following categories:
- ✅ Fulfillment - They want to do work that matters, for a cause they believe in. They don't want to be a cog in a wheel. They want to have impact in their community and make the world a better place. Imagine creating something that positively impacts hundreds, thousands or even millions of people. We're living in an age where a single person can make monumental impact in the world.
- ✅ Unlimited Income - The starving artist trope is gone. When you build something and it takes off, you reap 100% of the benefits. Creators can unlock additional income streams and earn anywhere from an extra $50/month to $20,000,000/year (and no, that's not a typo). In my first month of self-employment, I earned over double what I made working in tech. Now I consistently earn a healthy six-figure salary while working drastically less hours than before.
- ✅ Freedom - When your salary doesn't come from being in an office all day, you gain a ridiculous amount of freedom in your life. You can work wherever you want and take on projects that genuinely interest you. There's no bosses, reviews or office politics. You can spend more time reading, doing yoga or exercising. The most important aspect is that you get to decide how you spend your time each day.
There are other perks to being self-employed, like working with great clients, location independence, building a legacy and having the option to just not work for days/weeks/months. You can learn more about those here.
While these perks might sound like enough of a reason to leave your day job, don't give your notice just yet. Like I mentioned before there are pros and cons to every decision and self-employment is no exception.
The downsides of being self-employed.
- ❌ Risky. There is nothing guaranteed about entrepreneurship. Just because you think your idea is the bee's knees doesn't mean the market will. This is why I recommend people start small and build something on the side, instead of leaving their jobs to dive in head first.
- ❌ Loneliness. Most creators or self-employed individuals work alone. The challenges they face day-to-day are often much different than their employed counterparts, which can leave them feeling alienated.
- ❌ Wearing all the hats. You're the builder, the marketer, the sales person, the researcher, the strategist, the numbers gal and the customer support agent.
- ❌ Responsibility. Ultimately, the business thrives or dies because of your actions. That's a lot of pressure for one person, which is why this is probably the biggest thing holding people back.
- ❌ Stress. The pressure of the above points is enough to age you prematurely. You will work long hours in the beginning and you will inevitably blur the lines between work and home. It's crucial that you prioritize your mental and physical health in order to go the long haul.
Self-employment is kind of like investing. If you put your money into a savings account (ie. employment), it's generally safe and it will even grow slowly over time. Investing your money (ie. self-employment) carries more risk, but if it works out, you could get an exponentially higher return for the same amount of money put in.
It's important to reiterate that these are generalizations. It's hard to compare an engineering job at Apple with an entry-level job at Wendy's. Just like it's hard to compare a seasoned entrepreneur with 10 businesses with someone who just started a side-hustle. But in general, depending on what you value, these are how the two paths compare:
|Stability||✅ Consistent pay, working hours & responsibilities. Good dynamic if you're providing for a family.||Pay can be wildly inconsistent. No two days are alike. Can be difficult to start and scale.|
|Risk||✅ Limited responsibility. Less risk overall. Not personally liable if company fails.||More risk & responsibility. Your business lives/dies by your actions. You wear many hats and take on many roles.|
|Flexibility||Overall less flexible. Set working hours and locations. Have to work on things that benefit the company.||✅ Full control over when/where/how you work. Take as much time off as you need. Do work that interests you.|
|Money||Can be high in certain sectors, but generally capped by business/industry standards.||✅ Virtually unlimited earning potential. You reap all of the rewards if things go really well.|
Other things to consider
- Iceland just finished testing a 4-day workweek which apparently it was an overwhelming success. If you can work at a company that offers forward-thinking perks like that, it could alleviate some of the downsides like stress and burnout.
- Find a company that encourages entrepreneurship. Some companies actually encourage entrepreneurship as it can help keep morale high and employees engaged. This way you can have your cake and eat it too, without worrying about your boss finding out.
- It doesn't have to be one extreme or the other. You don't have to quit your job to venture into the world of entrepreneurship. There are millions of people out there that operate $100 startups and profitable side-hustles. Start small and see if this is a path that excites you.
🗺 Choose the path that's right for you
In closing, there's no right or wrong answers here. If you love your career and feel good about the work you're doing then you should probably stick with it. Don't let anyone pull you away from something you're passionate about.
On the other hand, if you're someone that dreads going into the office each day, maybe you should consider building a business that incorporates a work/life balance that better fits your lifestyle. If you crave more flexibility and have a higher-risk tolerance, you should probably explore self-employment.
The most important thing to know is that you have a choice. Just because you've been in the same career path for the last 5 years doesn't mean you're stuck there. Chances are there's a super rewarding career path out there calling your name that fits your skills, abilities and passions perfectly.
There's no right or wrong answers. Only right or wrong for you.
🙏 Big thanks to Miguel Bautista, Megan Turner, Tony Kwon, Darbi Nicole and Michael Young for their help on bringing the initial article for this together. Also wanted to thank my friends James King and Christian Charlesworth for being my second set of eyes on this. Appreciate you all.