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Patrick McGinnis shows how you can hitch your wagon to all the new entrepreneurial excitement without the need to go 100% in. In fact, 10% is fine.
Welcome back to the WorkMinus podcast where we talk about what needs to be dropped on how we view work today, and what we need to add to it. Today’s guest is Patrick McGinnis, the author of The 10% Entrepreneur, and this episode is Work Minus Your Day Job. Hi, Patrick. How are you today?
Hey, how are you?
Doing very well. Excited to have you on the show. Why don’t you tell us a little bit about the premise about The 10% Entrepreneur. What does it mean?
Sure. Work Minus Your Day Job is a great way to describe the concept. It’s the idea that all of us should be spending a minimum of 10% of our time and, if possible, 10% of our money, getting involved with entrepreneurial ventures outside of our day jobs. So whether that’s just starting something, being an adviser to something which is basically investing your time for ownership of a project, or investing your capital in a project. The idea is that we can build a portfolio of entrepreneurial activities that exists outside of our day job, that belong to us, that we can take with us wherever we go.
Yes. We’re not saying work minus your day job, you need quit your job. But think different. You almost need to add this entrepreneurial mindset to what you’re doing right now, right?
Exactly. Your day job is what allows you to do all these things. It allows you to pay the bills. It allows you to have stability. But, number one, day jobs aren’t necessarily stable themselves. Number two is you’re a lot more than what it says in your business card. All of us have skills and things that we want to explore on our life and that we can’t necessarily do in our day job. And so, therefore, I want to come up with an approach to completely flip the script, rethink how our day jobs work into our careers, and build something far more entrepreneurial that you control, where you have autonomy.
Yeah. And I think it’s a great idea and, obviously, the 10% element seem very achievable for most people. But let’s zoom out a little bit. Let’s talk about the state of employment today. We talk about work, in general. Do you feel like, based on trends you see, is it still as good of a deal as it was to be an employee 50 years ago, 10 years ago even? What have been some trends and shifts in our economy?
It’s interesting to think about it in terms of 20 to 50 year time horizon because, I would say, even 20 years ago or even 15 years ago, working as employee was kind of the only way to go. I mean, yes you could start a little business or something but, in general, there was a lot of benefits to going to traditional careers, corporate sector. The money was in finance, law, and medicine. And those were the places where all the brightest people went. If you looked at the graduating class of the top university twenty years ago, it was Wall Street, med school, or law school. That has changed.
There’s a couple interesting things that you can look at. The recent stats show that about 70% of Americans are disengaged from their work. More than half of lawyers and doctors wouldn’t recommend their fields to a young person. Only a quarter of people who work in finance are happy in their job because we’ve had these big changes in regulation, in the pay, in the lifestyle in these traditional careers. This meant that they are not what they used to be. In fact, if the prestigious careers are what they used to be, think about the normal humdrum careers. And so you have this, I would say, hollowing out of the benefits to these careers. At the same time, given the fact that technology and the internet has shifted the way that we work, anybody can, for very little money, start a company these days. All you need is the price of dinner at a reasonable restaurant, and a weekend, and you can launch a business. So as a result, I think a lot of people, including myself, have rethought the role of of their traditional careers as part of their overall portfolio of building their career.
Right. And you’re obviously very far along in this process in your thinking. But take it back to somebody who’s in the middle of the day job, hasn’t really thought more about getting out of it, what are some of the barriers that most people have in their day jobs that keeps them from this entrepreneurial mindset?
So I think there’s a couple. Number one is the strongest, it is mindset. The idea that if you’ve never done something before, it seems scary and intimidating, is natural. And you can also feel like, maybe, it’s too much time or too much money, or you don’t know quite where to get started, or you might fail. All of those things really about mindset because, at the end of the day, having now talked with hundreds of people who are doing this all over the world, I’ve realized that this is actually so pragmatic. And if you think about it – I’m saying 10%, it’s so pragmatic that even if you were to fail, you really have nothing to lose because you still have your day job. It’s your experiment at the very worst. But I do think that people look at this and they say, it’s kind of like training for a marathon. When you go out — and I’ve run a marathon. It is like the first couple weeks you are training, it’s mentally intimidating, and it’s hard to get started, and your sore, and things like that. But you were just running a couple miles a day when you first get started. It’s the same thing with this. You’ve just got to put one foot in front of the other, and move forward, and make a plan. So that’s what I advise them to do. But I think it’s still a change of mindset and change in approach that is not easy to make for a lot of people.
Yeah. And what are some of the skills that most people overlook in themselves when it comes to thinking about being an entrepreneur?
All of us have skills that make us unique and special. Even people who — and this happens to me all the time. People who you would think would know, people who are extraordinary who you think, well, they clearly know what they’re good at and what they’re doing, a lot of times, they don’t. And it’s interesting, I was giving a talk at Cambridge University in the UK, and a woman came up to me and said, I love this idea but I don’t know what I’m good at or what I should do. And I said, well, what are you studying here? She said, I’m getting a PhD in Genetics. And so I was like, “Wow. I mean, come on, if you can’t figure it out.” But here’s the thing. A lot of us, oftentimes, we forget that there are things that we may do on a daily basis like use PowerPoint, or use Excel, or be a carpenter, or design logos, things like that, that to us maybe seem commonplace now since we’ve been doing them and maybe we work alongside people who do those things. But to the person next door to you, or the person on the street, it seems like magic and that these are things that they would value. So thinking through those things — in the book, I go through a whole bunch of exercises to figure this out. Those are the things that give you a competitive advantage when thinking about what you’re gonna do.
We’re talking about WorkMinus. A lot of people that come and listen to the show are people who are managing teams. So even for them, specifically, they may be thinking, okay, I can get on this idea about being a 10% entrepreneur. But what about the people who are managing people, who are nervous about the fact of, “Wow, what if my entire organization adopts this entrepreneurial spirit and my whole business models made off of them working for me?”, what are some of things you can speak into that?
I think that’s been my biggest — that’s a surprise, I can say, but it’s one of the things that I have dealt with as I’ve talked about this book, because some corporations invite me as I’m sort of like a family member and they want me to talk about this openly. Organizations like Google or Viacom, they’ve been really supportive. Other organizations act like I am this forsayer of doom and I’m going to ruin their whole company. And what’s funny about that is that they’re just, I hate to say it, but they’re in denial. 40% of millennials are working on side projects, right now. The train has left the station. People are doing these things, whether it’s setting up a store on Etsy, or starting an app on the side or something like that. This is happening. So what I tell corporations is, this is happening. Accept it and then think about how to make it work for you.
And the reality is that the vast majority of people that work on side projects are not looking to go full time. Less than a quarter are. These people are looking for, yes of course, extra income. But they’re looking to explore new ideas. They are looking to meet people. They’re looking to explore passion. They’re looking to take risks and challenge themselves. And all of these things, if channeled correctly, can be brought back into the workplace to make the companies in which these people work more competitive. Because companies struggle to teach their employees to think entrepreneurial, the entrepreneurial way, I should say. It’s hard to tell people, give them a training module on your computer or give them a book and say, read this and you’ll be an entrepreneurial thinker. The only way to learn to think like an entrepreneur is to do the work of an entrepreneur, to actually go in every day and spend a little time working on something where you can potentially fail, where you have to come up with the ideas yourself, where you have to solve problems. And so what I tell companies to do is encourage your place do that on their free time, on their own dime, and then bring that energy back, and support the best ideas, support the learning, and find ways to channel that, ways that are really valuable for your company. And when they do that, and they do that, some companies, they find that it’s a win for everybody.
Can you give any examples that you’ve seen, practically, it’s working out in this way for companies?
Absolutely. There’s a couple of examples that I really like. One is, and I use this when the book, but it’s a corporate lawyer, the least entrepreneurial environment possible, I would say. This lawyer’s name is Hillyer Jennings, started out an interesting wearable tech company on the side and it’s a total sideline. He’s not leaving the law firm. But it makes him much happier because he loves it. He sees it as sort of something he owns. And so when he gets back from the office, he kind of de-stresses by working on it. But more than that is, when you’re a corporate lawyer and you’ve actually worked on building a business, and you’ve actually had to solve the problems of a business person, you are far more in touch with the challenges and needs of your clients. It just makes him a much better lawyer. That’s one. Second is there’s a kind of digital agency here in New York City that has all of its employees working on side projects and then actually supports the best ones and funds them through the company. So they had one employee who’s making these hot sauces and they created hot sauce brand and sold it through the company and commercialized it. And so that’s a really great situation where you’re taking great ideas from your employees, you are supporting them, and the employee has — actually, it’s a really powerful retention tool. And that’s what’s happening more more. I think these large companies are starting to see the fact that by supporting their entrepreneurial aspirations of their employees in things that could be totally unrelated to what they do during their day job, of course, they’re actually able to use this as a retention tool. Not that they have to fund them, but they can just acknowledge this is happening in say, it’s okay. We understand that on Sunday afternoons, you like to work on your new business and we think that’s cool. And by the way, it’s okay if you tell people about this. You don’t have to hide in the shadows. I think that’s a really powerful thing.
So let’s think about hiring people. I want to bring in lots of different topics here. But if you’re looking to bring in someone new and they’re straight forward, they say, hey, I want this job but I also have this little thing I do on the side, and maybe it’s remote working situation. I think we can all see the benefits of hiring somebody with an entrepreneurial spirit. But what are some of the the challenges, maybe cautions that organization should take when they’re bringing on that person?
So what organizations need to do is have very clear rules about these types of things because I can tell you, on the flip side, it’s always a couple bad apples ruin it for the rest of the bunch, right? You’re going to have people who use work resources for their personal projects, who are goofing off during the day. And the philosophy the 10% Entrepreneur, the philosophy has always been, you should not have to hide this. In fact, nobody in the book, and I have dozens of examples of people, nobody’s hiding it. It’s all out in the open. But these are people who do an excellent job at their day jobs so they are beyond reproach, A. B, they create a very bright line between the two. They’re not using work resource for their own projects. And number three is, they would never do anything that competes with their employer, that steals ideas from employers. There needs to be a very clear set of policies. And many companies have these already and are totally fine with this. But I think that’s super super important because if you do not respect your employer and you act in a way that is not ethically beyond reproach, then you’re asking for it. But it is uncommon upon the employers to lay down the ground rules and be extremely transparent so that people know what the rules of the game are.
Yeah. And I think it brings up another good point is that a lot of people, when they start to think about, okay, what are the talents that I have, oftentimes, those talents are already being used in their day job and the skill set is already there. And the best idea they can think of may be seen as a competition to their current employer. So how would you advise somebody in that situation who wants to do something but feels like it might conflict with what they’re currently doing?
So there’s a couple different ways to think about that one. The first is it may be that what you’re doing leverages from the same school. So say you just spend your whole day working on spreadsheets at some company, that is valuable skill set. It can be applied to many different areas. Maybe you become an advisor to a company and you help them with their budget. Who knows? That is totally uncompetitive even though you are leveraging the same skills. Another thing is there is a reality that 80% of successful entrepreneurs, according to the Inc 500, find their idea while working at a previous job. They see something that is in their industry and their space that their company cannot fix. It may be something that the company just will never bother and thing that they don’t want to get into that business, an employee comes up with that idea. Now, you can still explore their ideas as long as you’re not competing with your employer, using the resources or poaching anything from them, and then potentially launch the business down the line. So, for example, you’re working in a company and there there’s a huge market opportunity they’re never gonna take advantage of. So when you realize and work in there, that’s fine. What you don’t want to get involved is, literally selling to your clients. Self-dealing, I guess, is the right word. That’s where you don’t want to go. Or where you have a, for example, an employment contract that says you cannot do X, Y, and Z, that’s a whole different story. But what I intend to find is, and this happens a lot these days, it’s really is trying more and more is a lof times, people find a great idea and get going. And if they’re if they talk to their employer, they can actually get resources and support from the company and potentially investment, and you can actually end up in a much stronger position to launch that business because they’ve been able to garner resources from their employer.
So you would definitely encourage a lot of transparency when it comes to thinking about these opportunities, right?
I think you need to be transparent. Let me give you the counterfactual to that. There could be examples where, for example, you are Steve Jobs and this is a true story. Steve Jobs launched apple while he was working at Hewlett Packard which, eventually, was a competitor. But as my understanding, he didn’t violate any of his employment contract or anything like that. But if you are looking to launch your own business, you are not violating the terms of employment, you are being completely ethical, and you don’t feel comfortable telling people because of some perception that you could be competitive some day, I think it’s understandable that you wouldn’t go broadcast it around the office. But, again, you must — it’s not even just ethical. It’s like if you break your employment contract and then you go out and do this, they’re going to sue you and you could be out of business before you get started. So just in terms of being a good business person, you need to be extremely careful about respecting the rules at your workplace.
Have you seen any rules in employment contracts, you feel like, are pretty draconian in their usage today, that forward thinking companies need to look at and maybe remove from the contracts?
Yeah. I think this tends to be more traditional companies. This was a wild story. When I was interviewing people for the book, there’s a large company that’s owned by the Koch brothers, believe it or not, the famous Koch brothers. And I met somebody who worked at that company who is an executive there, doing quite well, but had started a business on the side that was not even competitive in any way. And this person was making more money on their side project than they were at their day job. It was kind of like Homeland or something. What do you call the computers that you never plug in the internet? One of those. He had a computer that he kept in his car, and he would go outside several times a day and work from his car on this other laptop, in order to run this other side business. And he knew that it was completely forbidden. This is not allowed. And so when I interviewed him for the book, I said, listen, your stories are interesting but I can’t include you because I’m not encouraging people to do that kind of behavior. But that, I think, is what happens when a company is ignoring reality. The reality that these days, lots of people want to work on side projects and, in fact, there’s nothing wrong with that. When they’re ignoring that reality, they’re just encouraging their employees to be deceptive.
Okay, the title of this episode is Work Minus Your Day Job. Tell about a future where there really is no day job. You maybe have something you do 60%, 70% that brings in a bulk of your income, but you have so many different side projects, and everybody’s doing this. What does a world like that look like?
Yeah. Well it’s happening already. I think the most recent figures had it at something like 40% of Americans will be freelancing by 2020. The trains left the station on this as well. Here’s what it looks like, here’s what it should look like. Here’s what it might look like, which is a bunch of people freelancing portfolio careers, you have a bunch of clients, everybody is consulting or many people are consultants. That’s fine and that is likely going to happen just because of the flexibility, and also because companies now want to hire contractors, and there has been a movement away from sort of the traditional job, because companies can save a lot of money if they pay a contractor. Now, here’s the problem. You don’t own anything. So the reason why I got into this whole world of 10% is because I started freelancing. And I realized, in freelancing, I’m making this money but the minute I stop working, that’s it. It’s like you eat dinner and then you walk away from the table. And I wanted ownership because ownership is the only way to really accumulate true wealth. And so what I encourage people to do when they think about the future of work is, that’s fine, work flexibly if that’s where your path takes you. But always make sure you are an owner, that you have ownership in these things, that you have stock. Because what would be really terrible is to work on some project, add a lot of value as a freelancer, it becomes some billion dollar company, and all you have to show for it is the money you charge as a freelancer. You have no upside. That’s the fundamental driver of The 10% Entrepreneur is that you were an owner of everything you work on.
Yeah. I think it’s a huge differentiation between the kind of gig economy that we were saying, that you talked about, and the idea of actually putting some skin in the game getting ownership out of that. It’s like saying, okay, I’ll contribute to this but I also want to not be the the person who is left out. That’s a very important distinction.
Yes. That is really fundamental and I think the problem is that if you’ve never been an owner of any business or you’ve never had stock ownership, and you haven’t experienced the power of being a shareholder, it may not be obvious to you. And so you may miss out on that reality. But I’m really convinced that I try to convince other people that that’s fundamental because many Americans — think about the Americans who don’t even own a stock. So they’re missing out on all of these things.
Do you find it fairly easy to interact with current business owners whenever you approach them and ask them for some share of ownership? Is that a fairly easy conversation or is that one that takes a lot of time and practice?
No. It’s shockingly easy. I mean, if you’re talking to me, and I wrote a book called The 10% Entrepreneur, then you know that I’m gonna come for you. It’s going to be part of the conversation. But I’ll give you the generic advice to somebody else. I have a friend — or a generic experience. I have a friend who’s a really brilliant guy, data scientist, and he was working, helping a woman out. And I knew her, as well, and she called me one day, and she said, did you give this guy your book? I was like, he bought it, yes. Why? And she said, because he’s asking me for stock in the company. He’s been working for me as an advisor, he’s been helping me out for free, and he’s asked me to give him a little stock. And I was like, well, why didn’t you do that in the first place? If you want people to help you out, it’s fine for a little while to just ask for a favor. But at some point, shouldn’t we all try to incentivize people to give us their best effort, and work, and energy? And isn’t that the whole point of the equity in companies is to incentivize people? And so it’s the right thing to do and I find that, even if it’s a difficult conversation in the beginning, once you get doing this, what you’re doing one time, then everybody else who comes to you, you can point to that one example and say, listen, I do this for this other people. I’d love to help you out as much. I’d love to work with you free for 50 hours a week but I’m very busy. And frankly, I really believe in what you’re doing and I wanna be a part of it and would you be willing to give me some stocks? And it’s become far more conventional than it was a couple years ago and I think it’s becoming something that we’ll see even more of in the future, especially with books like 10% out there.
Yeah. Fantastic. Thanks, Patrick, for being on the show. I really appreciate you coming on. The book is called The 10% Entrepreneur. Where can we find it?
So you can get it at Amazon, Barnes and Noble, and any other bookseller. Audible.com, as well, Kindle. And then if you go to my website, PatrickMcGinnis.com, you can find links to a private Facebook group that you’re very welcome to join, where you can discuss 10% with the people. I’m on LinkedIn, obviously, Youtube, Instagram, all that sort of stuff. And then, if you go to PatrickMcGinnis.com/buildyour10, you can download a free workbook with some of the exercises that are in the book and then I talked about today, that can actually get started today on building your 10%. So it’s a really great way to just experiment with the idea. You don’t even have to — you know, you can do this for free before buying the book to see if you think it’s interesting and then go download that book.
Yeah. Absolutely. It’s been great to talk with you, Patrick. Work Minus Your Day Job. Thanks a lot for being on the show.
Thanks for having me.