What I like most about self-employment.

SEATTLE, WA - What you are looking at is a fine example of lazy blogging!  It requires almost no time or originality on my part, yet you'll enjoy yourself for the next couple of minutes and maybe even send a link to your friends.  Call it McThought Leadership.  Mark Twain would be proud.

The video you're about to see features Amazon's Jeff Bezos explaining why his company bought Zappos.  Frankly, it's hard to imagine that Zappos was so good at customer service that Jeff Bezos admired them enough to acquire them.  But that's what the man says.  Does Mr. Bezos expect Zappos' culture to infect Amazon enough to pay for itself?  Apparently.  Yet Amazon already has awesome customer service.  Couldn't Mr. Bezos have simply raided the Zappos management team for less money?  Apparently not.

By way of comparison, Warren Buffett's Berkshire Hathaway acquires businesses that meet all of the following criteria (see page 24):

1. Large purchases (at least $75 million of pre-tax earnings unless the business will fit into one of Berkshire's existing units),
2. Demonstrated consistent earning power (future projections are of no interest to Berkshire, nor are “turnaround” situations),
3. Businesses earning good returns on equity while employing little or no debt,
4. Management in place (Berkshire can’t supply it),
5. Simple businesses (if there’s lots of technology, Mr. Buffett "won’t understand it."),
6. An offering price (Berkshire doesn't want to waste their time or that of the seller by talking, even preliminarily, about a transaction when price is unknown).

Re: Zappazon -- Make of this what you will.

In the following video, Mr. Bezos discusses the importance of inventing (2:59) and thinking long term (3:58).  I do that a lot.  In fact, I almost do it so much that I leave some of today's dollars on the table.  Whatever.  I don't think recruiters innovate nearly enough, and I look forward to the future in ways that most recruiters can't possibly imagine.  And it's not because I'm smart.

Not at all.

Being able to innovate and experiment is one of the all-time great advantages of being self-employed.  My biggest security lies in the total insecurity of my position.  All of my paychecks are variable.  Yet there's nobody (other than my wife) to tell me I can't buy such-and-such a domain or whatever.  I just get a wild hair, and boom.  Sometimes I'm wrong.  Sometimes I'm right.  And sometimes it's still too early to tell.

I'm fine with that.  In fact, it's what I like most about self-employment.  Today, I'm 45 and self-employed and relevant.  In ten years I'll be 55 and self-employed.  Whether or not I'm relevant remains to be seen.

Let's see how well I innovate.

Comments

[Jack]

Interesting insights, thanks for sharing!

[Michael Zipursky]

Harry, Amazon's approach may very well be like that of any wise venture capital firm.

They aim for strategic investments that have the potential to make big things happen ... or in this case even bigger things.

And as you rightly point out in your post, some will pay off and other's won't. In fact, most don't last very long, but every once in a while one or two really hit payday.

Take a look at this chart that shows Amazon's history of acquisitions and investments if you haven't seen it before:
http://www.techcrunch.com/wp-content/uploads/2009/07/amazon.png