Jeff has founded several other technology companies, including Spinback, a social sharing platform (eventually purchased by Salesforce).
He began his career in finance, serving as Managing Director at activist hedge fund Barington Capital Group, a Vice President at venture capital firm Glenrock and various roles in the M&A Group at JP Morgan.
He is an active angel investor and startup advisor, as well as serving on numerous public and private Boards of Directors. He also formerly served as an officer in the Auxiliary Unit of the New York Police Department.
Jeff is the author of The Birthday Rules and The End of Jobs: The Rise of On-Demand Workers and Agile Corporations.
He frequently speaks at conferences and in media on startups and labor issues and holds an MBA from Harvard University and an MS and BS from Cornell University.
The Ultimate Guide to Website Traffic for Business
What you will learn
- When to use freelancers instead of full-time employees
- If outsourcing is a cheaper form of labor
- If the internet is reducing transaction costs
- The three historical functions in technological change; mechanization, electrification, and computerization
- What you need to study to understand the future of work
- Why you shouldn’t just hire cheap labor
- If 50% of work will become remote
- Why the future of work will be fluid, team-based, work-from-anywhere and always-on-job
- Who should pay for retraining in the new world of jobs
- Why we need regulation and a social safety net
- If unions need to reinvent themselves
- Why raising a lot of money for your startup is a double-edged sword
- Finding the right problem and solving it is hard
- The big question most startups don’t answer
- Why most startups fail
- Why failure is your most likely outcome
- If you should take money or stock
- The two big work trends of “Hard Tech” and “Hard Human”
Jeff Bullas: Hi everyone, and welcome to The Jeff Bullas Show. Now, today I have with me another Jeff, and he spells it the correct way, J-E-F-F, Jeff Wald. Welcome to the show, Jeff, it's an absolute pleasure to have you here.
Jeff Wald: And thank you, Jeff, it is a pleasure to be here.
Jeff Bullas: And I'm going to just read a little bit about what Jeff has done. He's the founder of WorkMarket, which is an enterprise software platform that enables companies to manage freelancers, and it was recently acquired but he's now free and let into the wild, apparently, to share his expertise and passion with the world, again, without the constraints of working for a company. He's founded several technology companies including, Spinback, a social sharing platform eventually purchased by Salesforce, that's very cool. Jeff began his career as finance and as managing director of activists hedge fund, Barington Capital Group and GlenRock and various roles in M&As at JP Morgan.
Jeff Bullas: He's an active angel investor and advisor as well, serving on numerous public and private boards of directors. He's the author of, Birthday Rules, and the one that fascinates me the most, The End of Jobs: The Rise of On-Demand Workers and Agile Corporations. Jeff holds an MBA from Harvard University and also an MS, Master of Science and Bachelor of Science from Cornell University. It's an absolute pleasure to have you on the show, Jeff, here's Jeff interviewing Jeff and that's absolutely fantastic. If I get mixed up, Jeff, then you can just let me know, I'm talking about myself instead of you, it's okay.
Jeff Wald: Not a problem, not a problem.
Jeff Bullas: The End of Jobs, a book you wrote, how long ago did you write that book?
Jeff Wald: The book came out about five months ago and it's been a great ride. We were lucky to hit number one on all of Amazon's HR categories, for a little bit. And it took me about seven years to write it though, so it's been a long journey in and of itself.
Jeff Bullas: I've written a book and in the middle of another one now, and I totally understand the 7-year journey. It's like life and business gets in the way because, when you're writing, it almost needs your total attention, in a way, doesn't it? Let's wind back, you obviously were doing a science degree initially, tell us a little bit about the young Jeff and how he went to Cornell. What were his interests and passions when he was the younger Jeff in his teenage year?
Jeff Wald: Wow. I have not talked about younger Jeff in quite some time, that is good. Well, Jeff, younger Jeff went to Cornell for basically one reason, and that was that my father found out that Cornell University, some of the colleges within the university, if you lived in New York state, it was half-price. And so he very quickly declared, "And this is where you will be going." I'm not sure I could have gotten into any better schools but I was lucky enough to get into Cornell, and it was a great journey. I did a combined undergrad and grad program, with a master's in public policy. That's the MS part from Cornell and then my undergrad was in economics. And so young Jeff was super excited to be at such a wonderful institution, and then was fortunate enough to get a job at another wonderful institution, JP Morgan Chase, and began as an investment banker.
Jeff Bullas: All right. Was that because you're interested in it or was that something that, again, was half-priced so that's why you joined?
Jeff Wald: No, no, JP Morgan was bank full price, they were certainly bank full price. I will tell you this, Jeff, I spent my fifth year at Cornell because of the combined undergrad and grad program, for the master's in public policy. I spent it interning on a campaign, first part of it anyway, for a guy that I met that was running for mayor of the City of Ithaca. And I just wanted to get engaged in politics, the masters is a public-focused degree, and he ended up just promoting me and promoted me and by the end, I was basically running the campaign.
Jeff Wald: And it was such an amazing experience and I will never forget election night, in 1995, in Ithaca, New York. As the returns would come in and we were up five and we were down 10, and I had to leave the room and I threw up because I was just so nervous about what was going on. It was really a wonderful thing and I was so fascinated that I got that involved, and so much was on the line for me, in regards to somebody else's ambition to run the City of Ithaca. And he won, a wonderful, wonderful guy by the name, Alan Cohen, won the mayorship of the City of Ithaca. He was a local business owner, ran as an independent, and I served as de facto chief of staff, and it was an amazing, amazing experience.
Jeff Wald: And then when I finished my master's thesis and graduated, he said, "You should stay, you should stay in the City of Ithaca." And I had always known that I wanted to be an investment banker, I appreciated the hardships that one has, being an investment banking analyst. Hardships meaning, 120 hours a week of work, real hardships in the context of social injustice or things like that. And I knew it was a great way to be indoctrinated into the business world, and I wanted that trial by fire. I remained good friends with Alan Cohen, who is no longer the mayor of City of Ithaca, that was nearly 30 years ago. And so I came down to New York City and started at JP Morgan to get a very round, very intense indoctrination to the world of high finance and business.
Jeff Bullas: You would have seen quite a few changes in that space, over the last, what is it, 25 years?
Jeff Wald: It certainly has been a business that has evolved as every business has had to evolve, and companies like JP Morgan Chase are, I think, just now having to evolve in an even more rapid pace, given everything happening in fintech. You see Ant Financial going public in Shanghai and Hong Kong, on November 5th. That will be a substantive change in that company, which didn't exist 10 years ago, they priced their IPO today, will be valued more than or just about the same as JP Morgan Chase. And I'm sure, on its first day of trading, it will be valued at more than JP Morgan Chase.
Jeff Bullas: What does Ant do? I have heard of the name it's-
Jeff Wald: Ant is a digital payments platform, they enable digital payments but not the way we think about it, right? We think about digital payments taking our phone and swiping it past a PIN pad. That's just a digital way to do the exact same payment, it's just, all it's doing is a different way of reading our credit card. Instead of us swiping the credit card, it's just grabbing the data from our phone. Digital payments are more along the lines of a Venmo, for those in the US, or a PayPal or some other equivalent, where we're just moving it from one account to another and we're bypassing the traditional rails of the finance system. And that provides a substantive challenge to companies like JP Morgan Chase and visa and MasterCard, that have controlled these rails for so long.
Jeff Bullas: It's fascinating to watch that and I get most of my payments via PayPal, from all around the world, it's instant. You see the traditional banks and the fees they take and the time they take to transfer, you're going, "You're just hanging on my money because you can and because you want to use that, for making some money on the way through and take a fee for almost doing nothing, because it's so digital now," is that correct?
Jeff Wald: I would challenge that a little bit, Jeff, I wouldn't challenge it entirely but I'd challenge it a little bit. Like, at WorkMarket, we move billions of dollars around because we were the platform that a lot of companies, most large companies that manage large amounts of freelancers, used our software. And so if you're working with ABC Corp and they're going to pay you $1,000, they upload the $1,000 to WorkMarket, they hit pay and it goes into your account on WorkMarket, the freelancer that did that job for $1,000. And then you tell us how you want to disperse it, you could disperse it to PayPal or to a debit card or to your bank account.
Jeff Wald: And I will tell you, even just touching that money for a little bit means you have a lot of responsibilities, in terms of KYC and AML. KYC, Know Your Customer, AML, Anti-Money Laundering, let alone the GDPR or other privacy concerns you have around people's data. It is very, very complicated to run these businesses and they need to be done really well, with the highest standard of security. And that stuff is not cheap to do and it is not cheap to maintain, and so-
Jeff Bullas: Like a compliance and regulation?
Jeff Wald: Yes. And coming from an organization, this last company, WorkMarket, was bought by ADP about two and a half years ago. Watching ADP, Jeff, I mean, we moved billions, they moved trillions of dollars around the globe, they are the world's largest payroll engine in addition to being the largest human capital management software company. And I have been inside their NOCs, their Network Operation Centers, it is mind-blowing, the infrastructure and technology a company like ADP brings to bear, because you got to make sure no one's stealing that money.
Jeff Bullas: Let's dive into a little bit about how you, obviously, started WorkMarket, when did that journey begin?
Jeff Wald: That journey began on June 4th of 2010, was the formal starting of a company called WorkMarketing.
Jeff Bullas: Where did that inspiration come from?
Jeff Wald: There were two founding predicates to WorkMarket. One, was a paper written in 1937 called, The Nature of the Firm, by professor Ronald Coase, he won a Nobel Prize. And it talks about why we have these things called companies, why do companies exist? Well, they exist because it allows for the accumulation of capital and knowledge and workers, because it is much more efficient to produce output. But what's the right structure for companies? And Professor Coase theorized, first as a theory, the theory was companies are better off having very small, fixed cost kernels. Very few people employed, full-time, by the company and everything else being done on an on-demand basis. He didn't use the word on-demand, he used the word on a contract basis. The way you don't have a whole team of inside lawyers, you work with an outside law firm, you may not have a whole team of janitors employed by your company, you employ a service that comes in and performs janitorial services.
Jeff Wald: And he felt that almost all functions in the company should be outsourced, that was the theory. But its conclusion, in 1937, was that the costs of engaging somebody, of setting the terms that you're going to work with them and managing them through it, and then paying them and off-boarding them. Those things were so high that you were better off having a very large and inefficient fixed cost structure, at a company. And I remember reading that paper at Harvard, during business school, and thinking, "Okay, I appreciate, in 1937, how that was the conclusion but if we've learned anything about the internet, it is that it reduces transaction costs. And so would Professor Coase come to the same conclusion today?"
Jeff Wald: Actually, at business school, I started to rewrite that paper. I started writing the paper, I got a thesis advisor called, The Nature of the Firm Revisited, and very quickly realized that it was beyond my capabilities. I was not smart enough to do it so I spent most of business school time just getting drunk and having fun, it was a much better use of my time. But I never forgot that statement that, kernel of, should companies be re-imagined? That was the first predicate.
Jeff Wald: The second, was my co-founder had started the first online marketplace, a company called OnForce. And within OnForce, he had built an IT services marketplace and all of his customers always used to ask him, "Well, can you do more than IT services?" The answer was, "No." "Can I bring my own contractors on and not just use the marketplace?" And the answer was, "No." And we thought we should be able to answer, "Yes," to those questions. And answering, "Yes," meant building enterprise software, not a discreet marketplace of just a few people.
Jeff Bullas: You started it in 2010, it was a very interesting time because I started writing about social media in 2009, that's when I started. Because I was fascinated by the ability to reach the world and rather than just being local. And we had a little bit of a chat before about it. You looked at my site and thought I was from America and I said, "Yeah." When I started, I realized that my data is if I was one of you guys, that there would be... I'd be welcomed to the club before they made a judgment, whether I was an Aussie or not.
Jeff Wald: Fair enough.
Jeff Bullas: And what I mean by that is, that we're more comfortable with our own nationalities and so on. Right from the word dot, I really made it apparent that it was global And what excited me about social media, despite its foibles that we're in the middle of exploring, like fake news and narcissism and everything else. Any technology has both good parts and bad parts, dynamite had the same issues, nuclear power, the same issues.
Jeff Bullas: What excited me about social media was the ability to reach the world. And also, this is why your book, The End of Jobs: The Rise of On-Demand Workers, is re-imagining corporations and how we work. Is something that is quite dear to my heart because I have a virtual team, from all around the world, from Hungary to the Philippines, to Australia, to the US. And it's a fascinating world that we live in now but we've got, literally, over a century of the modern corporation that is very part of who we are, and how we operate, and how we work. And so you started the business with your partner and just tell us a little bit about how you got the inspiration because it came from the re-imagining of work, could you outsource workers or should you do a low-paid, very inefficient bunch of employees as described in 1937? I think it was. What were some of the challenges as you started this platform, WorkMarket?
Jeff Wald: Well, I will tell you this, Jeff, we were super fortunate because my co-founder and I, confusingly, also named Jeff by the way. He and I had built a company together before, successfully, we had built a company together before, unsuccessfully. Our first company together failed, and so when we went to venture capitalists with this new idea, one, it was a big idea. The idea to re-imagine the way the world works, you're talking about... McKinsey did a study in 2008 saying there's 1 trillion in on-demand labor, if companies had the systems and processes. That 1 trillion can move to 3-4 trillion. And anytime you're throwing the word trillion into your business plans, you know you're working on something potentially big.
Jeff Wald: It was a big idea, you had a team between my co-founder and I, that had been together through failure, through success. He had had a few startup successes before that and so we were fortunate that, just with our business plan, we were able to raise $6 million in seed funding. It was just me, Jeff, 19 PowerPoint slides and two of the best venture capitalists in the world, who used Square Ventures and Spark Capital, gave us $6 million.
Jeff Wald: We were very, very fortunate and I would tell people out there that are able to raise money very quickly, it's a double-edged sword. Obviously, it is a great thing and we could immediately hire a team, you'd think that we would just go with an outsource team but, actually, this is one of those circumstances where I think you need full-time employees. One of the many, many circumstances, I should say, where you need full-time employees. But we started a countdown a couple of months in saying, "We're going to launch in a 100 days."
Jeff Wald: And we literally went onto the walls, we used to write on the walls in that first office, which is one of the many reasons we lost our security deposit. And we just wrote the number 100 and we said to the team, I think there were 15 of us at the time, almost all developers. We said, "We're going live in 100 days," someone's like, "Where'd you come up with that?" We're like, "We just made it up, where it's the a 100-day countdown, it starts now." And then every day we'd cross it out and write, "99, 98, 97," and we did launch and it ended up being February 14th, it was Valentine's Day, 2011.
Jeff Wald: And there were a numerable problems, I tell people that there are 10,000 mistakes that we made in the building of WorkMarket. And the first one was actually calling it WorkMarket, quite frankly, because in the labor world, there are platforms and there are marketplaces and because I called the company WorkMarket, everyone thought we had a marketplace and we don't, we're a platform for companies to manage their own labor. But that was mistake one of the 10,000 mistakes we made, but we were fortunate to have a great team of people and then great investors that stood with us, through those mistakes.
Jeff Bullas: You launched at 100 days. Now, any business is a risk, no matter how much money you raise or got behind you. It was interesting, I think there's one company that launched six months ago, in the US, can't remember the name of it, raised $1.5 billion and they shut the doors.
Jeff Wald: Quibi.
Jeff Bullas: Yeah. Quibi.
Jeff Wald: That was a terrible idea, I don't know who funded that, that was just crazy.
Jeff Bullas: Well, I looked at briefly what it was and I said, "Gee." It looked like a problem straight from the start.
Jeff Wald: It really did. It had great executives and obviously great investors, who I'm sure put money behind it, but I just don't understand, as a consumer, it had no appeal to me.
Jeff Bullas: Yeah. Obviously, it had no appeal to anyone.
Jeff Wald: It had appeal to very few people.
Jeff Bullas: Because a lot of times you start, you get an idea of the big problem you're going to solve. And I recently interviewed Bryan Clayton, he does Uber of lawn care and he thought his problem, the challenge he was launching to help his consumers or users was, provide the cheapest lawn care. When he launched, he discovered it wasn't about cheap, it was about convenience. In other words, "Just get a person to show up and mind my lawn, I don't care how much it costs," in a sense. When you launched, at 100 days, were you solving the right problem? How did that go?
Jeff Wald: That is a great, great question. I actually literally just spoke with one of our former engineers today and he asked me a very similar question. And then given the fact that I just left, my lockup ended, I've been very reflective and looking through files and moving old files onto my personal servers. And I found the original business plan for WorkMarket and I will say, we pretty much executed to that plan, which was a mistake. Because, as I said, to one of our former engineers today, we were not solving the number one problem that our customers have. We thought their number one problem was efficiency and compliance, you've got this army of freelancers but you don't know who's where, who's signed what legal, who's working on what, who's good at what, "We're going to be able to build this platform to solve that problem for you," and they all said, "Yeah, I have that problem, that's really cool."
Jeff Wald: And I would remember this, Jeff, we'd go into sales meetings and I'd say, "Number one mistake I made was calling it WorkMarket, we don't have a marketplace," and they'd say, "Okay, but I really need plumbers in Cleveland," and I would say, "I understand, but let me make sure I'm really clear about this, we don't have plumbers in Cleveland, it's software, efficiency and compliance." They say, "I get it." We'd spend an hour, I walk them through the whole song and dance and at the end of the hour, they'd be like, "Oh my god, I totally see it. Efficiency, compliance, that's amazing. Before you go, I have one last question for you though, how many plumbers do you have in Cleveland though? Because I really need plumbers in Cleveland?"
Jeff Wald: And here's the thing, when you hear that a couple times, it's not them that doesn't get it, it's you. I didn't get it, I should have stopped and given them what they really wanted, which was plumbers in Cleveland. Now look, we had a great outcome, we in total raised about a $100 million in venture capital, all of our investors made money, everybody in the team made money, it was great. But we didn't achieve what we set out to achieve, because we didn't pivot and really give them what they wanted, what they wanted was plumbers in Cleveland.
Jeff Bullas: That is fascinating that you thought that the big problem was compliance and processes, but the biggest problem, what you just described then, was before that, they just wanted a plumber first then they can look after the rest later, is that correct?
Jeff Wald: They did. And I would often say, when I finally realized this a few years ago and tried to start pivoting us, which I didn't do successfully. I would often say, "They will forgive us, all the other mistakes, all the other features we don't have, bugs that we have, all kinds of connections not working, this API doesn't do this. They would forgive us all that if we got them the people they need." If you solve their number one problem, they'll forgive you for the fact that number two, three, and four aren't perfect. But if you're not solving number one, if you're just solving two, three, and four, for me, you better be solving them real close to perfect. Because I'm not forgiving you anything because I still have my number one problem, that's causing me pain.
Jeff Wald: And so we, unfortunately, were very focused on two, three and four, which were important problems to solve. And we solved them better than anybody in the world but, because we're not solving number one, they demanded so much from two, three and four that we would get caught in minutiae and fixing every tiny thing, which we had to do. But they would have forgiven us that, if we got them plumbers in Cleveland.
Jeff Bullas: The reason I asked that question is because I've heard so many startups think they know what the customer problem is, and it's not until... An idea is an idea until it hits the ground, then you discover whether that idea works.
Jeff Wald: Right.
Jeff Bullas: You obviously made a success of it, in other words, you're solving some problems, there were enough problems too. You exited how long ago, because you've just obviously been let off the golden handcuffs, I suppose, on performance and everything else? When did they come and make an offer to buy you?
Jeff Wald: I will tell you, they made an offer to buy us about three and a half years ago, but they finally did buy us and close on it about two and a half years ago.
Jeff Bullas: Right. Okay.
Jeff Wald: It was the beginning of '18, of 2018.
Jeff Bullas: Right.
Jeff Wald: And I gave my word that I would stay for a certain period of time, that period of time is up. And so I remain an advisor to ADP, I have nothing but amazing, amazing things to say about ADP, but for a guy like me, who's an entrepreneur who just likes to run fast and break things, ADP is one of the best large companies in the world but they do not run fast and break things. They move very methodically and they dot every I and cross every T as well they should, when moving trillions of dollars around the globe. But as much as I loved it there, it was time for me to think about my next adventure.
Jeff Bullas: Next adventure. Let's wind it back a little bit, you mentioned that you did do a successful startup and a non-successful startup, prior to this. And there's one that you sold called, Spinback, that you sold to Salesforce. It sounds like that was the successful startup, is that correct?
Jeff Wald: That one was successful, but it was also a failure. We had a company by the same name, two and a half years maybe three years earlier, that didn't work. Now, Jeff, it didn't work because there were three of us that founded the company, the other two couldn't get along and after a year and a half, they finally blew up and they sued each other and it was just a mess, just an absolute mess. And it took a couple years for us to get the assets back, once all the lawsuits got settled, and then we were able to restart it. But I will tell you, when that company went down, I had been funding it myself and one of the other founders. And then when it went under, we had a lot of investors, I dug into my own pocket and paid those investors back, and those were my last dollars and so it basically bankrupted me.
Jeff Wald: And I remember not leaving my apartment for a month because I was just so depressed from that failure, I'd had all of this tremendous success before, with the schools that I was fortunate enough to go to, with the firms I was fortunate enough to work at, and there I was standing and getting a phone call from my mom, asking me if I needed to move back home. And look, we should all be so lucky to have that support network but that doesn't make it any less horrifying to somebody, to think to yourself, "Oh my gosh, I just failed at everything and I'm out of money, how did it come to this?"
Jeff Wald: And it was tough, it took me a month to pick myself up, dust myself off and get back in the game. But it's an important lesson, it was an important lesson for me and it's certainly important for other entrepreneurs to understand the success stories that we read about, the companies that get sold for whatever, go public for whatever, those are the minor, minor, minor stories of what happens in startup land.
Jeff Wald: We all know the statistics that 90% of the companies are going to fail and all these other things. And so when I talk to founders, I say, "Failure is not only an option, it is your most likely outcome and that's okay. You got to pick yourself up and dust yourself off, we have all been there, we have all failed." And so it is important, for those of us that have been successful, to talk about the failures that have lifted us and given us the strength of character, the strength of determination to continue through, because those are the things that paved the way for the success.
Jeff Bullas: Exactly. I've had, over the years, success and failure and it's very painful. And I do remember once, when it was a tough time in life too, I'm going, "I can go back and live with mom and dad," and it's like, "Gee, I just can't do that." It was maybe an option but the chances of success are very, very low for most startups and it's tough. But I suppose, as human beings, we're always full of ideas, we want to have a go, we're creative individuals. And being in business is a creative endeavor, much as a lot of people don't think it is.
Jeff Wald: Of course, it is.
Jeff Bullas: Before we move on, I want to chat about your book, The End of Jobs, book soon. But the other thing is, tell us a little bit about Spinback and the successful re-invention of the first company that didn't work. Tell us a little bit about that and what the business concept was, and how you got to sell it to Salesforce.
Jeff Wald: The concept was the idea that people like sharing products, they like to take products and either associate with them or share them with their friends or both. And when we started Spinback, the only way to do that was to copy the URL and to email it to somebody. And be like, "Hey, I just saw this cool pair of shoes. Hey, this jacket's on sale," whatever it is. And so we wanted to give brand owners and retailers, e-tailers, the ability to empower the consumer to share the product in a more efficient way. We created what is known as an advertising object that had a picture, that had a description, that had a buy button, that had a spin button, so I could send it to you or post it on my Facebook page or post it on my blog. And you could either buy it from there, I mean, buy it and then go back to the store and buy it, or you could spin it forward, and so we created what were known as viral recommendation networks. And in 2006, when we started the company, that was an incredibly novel idea.
Jeff Bullas: Yeah, absolutely.
Jeff Wald: It took until about 2010 to get it back and as we got it back and started to redo it, my co-founder and I had already started the business plan writing for WorkMarket. We had a choice, we had a fork in the road, "Do we go do one business or do the other?" And we decided, "Let's do them both but we're going to bring on two partners." We brought on two new partners that took the front seat on Spinback two, and these are two kids, I mean, they're not kids anymore as this is over a decade ago but at the time they were. I mean, they were sleeping on friend's couches and bed borrowing and stealing and doing everything that a scrappy startup founder had to do.
Jeff Wald: I gave them some money, some friends gave them some money, but they had to really hustle to get this done. And they did, it was not sold directly to Salesforce, it was sold to a company called Buddy Media. We became one of the largest, some largest individual shareholders of Buddy Media. And Buddy then got bought a few months later by Salesforce, for $800 million. And Buddy was one of the great New York City tech success stories, and I remember when the deal was going through, Jeff and I were knee-deep in WorkMarket. We are spending some time on Spinback but it is really the other guys that are taking it and running it forward. But when big strategic decisions were to be taken, we stepped in and I stepped in because Buddy Media made an offer, and they made an offer in all-stock.
Jeff Wald: And I remember sitting down with one of the Buddy Media board members and I just said, "Look, you guys got to give us cash, I'm not taking your stock, it's crazy, you guys were just valued at $150 million, you only have $15 million in revenue, that's insane. There's no way I'm going to give you this company for stock in your company, I want to have cash." And this woman who is a very dear friend turned to me and she's like, "You need to just shut up. A, the deal's not going to happen for cash, if you're insisting on cash, just take your company and get the heck out of my office because it's not going to happen. B, you are dead wrong, I am telling you as your friend, just shut up and take the stock." And so I am certainly smart enough to know when I'm not the smartest person in the room. I said, "Done, let's get the deal done," we signed it up and we took their stock valued at $150 million and then a few months later they got bought for $800 million, which I'm assuming she knew was happening.
Jeff Wald: And so it ended up being a great outcome but I'll tell you this, Jeff, when people ask me the story about my startup journey, up until a few years ago I would just say, "Oh, I founded a company called Spinback and through various twists and turns, it got sold to Buddy Media and then Salesforce." I never told people about the failure, about the depression, about how many years it took to build myself back up. And that was a failing on my part, I should have been much more candid about it for a much longer period of time.
Jeff Bullas: I think people, if you just talk about success with the term, then talk about the failure and the pain along that journey to get there. I think if you are willing to be open about that, that's Brene Brown with the power of vulnerability, I think it's when you can even stand on stage and share those stories of loss, that's what makes you really human and also gives you... Everyone thinks that by doing that you show weakness, I think it shows power.
Jeff Wald: I'm in violent agreement and I would certainly encourage everybody to watch her Ted Talks, I think she's a gift to the world.
Jeff Bullas: Yeah. And I took that and I used the stories of failure and also success, to talk from the stage and when I spoke around the world. And it makes you real, it makes you authentically and much more believable. You sold Spinback, you're working on idea two, now let's get to the book, The End of Jobs, took you seven years to write.
Jeff Wald: Maybe 10.
Jeff Bullas: Yeah. And I totally get that. And you talk about, I suppose, the world has had, you said, three functions in technological change; mechanization, electrification and computerization. And now we're in the middle of the fourth, big leap, which is robots and AI.
Jeff Wald: Yes.
Jeff Bullas: Let's have a little chat about... I'd be really intrigued by your thoughts on where the future of work is going. And are we seeing the end of jobs or we're just seeing the reinvention of work?
Jeff Wald: Well, I'll tell you this, Jeff, nobody has any idea where the world of work is going, right? Let's just start with that. This stuff is super, super hard and anyone that pretends like, "Oh, in 20 years, this is going to happen, you have no idea, just shut up." This is why I wrote the book, to give a framework for people to have thoughtful discussions about the future of work. And look, within it, I use that framework to make some predictions and I'm not going to shy away, I will give you my thoughts about what's going to happen. But I acknowledge that they have a reasonable probability of coming true, not a very high probability.
Jeff Wald: People that make predictions in the future of work outside of the corpus of evidence available. And to me, in the world of work, that is the history of work, as you identified, these three technological functions we've been through before, how do you make predictions on the fourth industrial revolution if you don't study the first three?
Jeff Bullas: Exactly.
Jeff Wald: History of work is one, the data in the world of work is two, and then three is how companies actually engage workers. I'm going to harken back to something you said, a little bit ago, around the guy doing the lawn business. Everybody makes this assumption that, "I just want the cheapest employee to do whatever," and that's how companies make decisions. That is a ridiculous statement for anybody that has actually been involved in labor resource planning, at any company. Companies don't just sit there and be like, "I tell you what, find me the cheapest workers and let's go," that's not how that meeting goes, at all.
Jeff Wald: And so that is the third piece of evidence, is how companies actually engage workers. And if we think about the history, the data and how companies actually engaged workers, we can really start to understand how companies and workers and government, society are going to adapt to robots and AI. And so I wrote the book out of frustration because people would make ridiculous predictions, including by the way, even right now. I've been on panels, in the last two months, where people have said the following sentence, "Jeff... " Well, not to me, to the audience. They'll say, "I'm predicting that, post-pandemic, 50% of the US workforce is going to work remote."
Jeff Wald: And I'd sit there and I'd just put my head in my hands and I'm like, "Oh, really? That's your prediction? 50% of the US workforce is going to work remote?" "Yes, that's my prediction." I would say, "Okay, are you aware that only 42% of the US workforce can work remotely? That is the natural limit? And the United States has the highest limit of workforce that can work remotely, in the world?" And they would say, "Well, no," I'm like, "Okay, because I don't know how you predict 50% when only 42% of the workforce can work remotely." It's just a poignant example of people making predictions outside of this corpus of evidence.
Jeff Wald: That said, when I called the book, The End of Jobs, it is not meant to say that robots and AI are going to take jobs. I do not think that, at all, it is to say, the job that we know, the one office, one manager, 9:00 to 5:00 job, that job is ending. And it is giving away to what we call the fluid, team-based, work-from-anywhere, always-on-job. When we think specifically about robots and AI, I will tell you, when we break down the data, the most intelligent analysis I have seen and helped put together would say that, we will have no net job losses from robots and AI.
Jeff Wald: There will be job losses, 10% to 15% of jobs over the next 20 years will go. But we will grow other parts of the economy, we will grow other sectors and more jobs will be created than are lost. And so the big challenge for the fourth industrial revolution is the same challenge that we had in the first, second and third industrial revolution, which is we need to retrain workers from the jobs and industries that are dying, to the jobs and industries that are growing, and that's the challenge.
Jeff Bullas: Yeah, it is. I think the other... That's some great insight and I totally agree with you, no one knows what's going to happen in 20 years. And I think what's important is and you've identified the four big shifts, and robots and AI is the next shift driven by the intersection of technologies. But I think identifying trends is going to give you an insight into where is it all moving, and then how can I adapt to that? And I found that area quite fascinating.
Jeff Bullas: I've left a very traditional industry, I was a teacher, that was my first career. Then I've been in others, I've been in retail, which is the worst business decision I ever made. I started a seven-day a week retail business selling beds and furniture and, gee, that's a story on its own. And I finally found my way back into the digital, that was six-year disaster that happened but that's fine. But the future of work... I think the other thing that fascinates with the future of work and it gets very much to society. And we've just seen a huge antitrust case launched in the US, against Google, by the government.
Jeff Bullas: And what I've watched around the world is the big corporations are all about minimizing tax, and eventually power to... Google's catch-cry used to be, "Do no evil." The reality is that, and we're seeing it in America, we're seeing it around the world, is the hollowing out of the middle-class. It was the rich get richer. And the middle class, it was the aspirational class after the Second World War. That the American Dream was to be able to start a business, increase your standard of living. How do you see robots and AI and corporations playing out with that, as humans? I'm sure you've got some insights on that.
Jeff Wald: When I talk about the doom, with the challenges that society will have, it is around this retraining and it is around the exacerbation of existing gaps in society. Now, whether those gaps are racial gaps or geographic gaps or socioeconomic gaps, they are substantive gaps in a lot of different societies, certainly in the United States, which is the main focus of study of the book. And if we do not do the retraining necessary to get people into good, what are traditionally middle class jobs, which are growing. Pre-COVID, there were more job openings than there were unemployed people in the United States. It is the getting the matching of those two which is an issue.
Jeff Wald: And so it gives me hope when I see different technologies coming on the stream, that use VR and a host of other new modalities to help train people. Because who does this training is a big question that we have yet to answer, is it the education system? Do the high schools start doing it? Is it a post-secondary thing in the education system? Is it a personal responsibility issue, that people have to get their own headsets and do their own VR trainings or take their own online courses? Do companies do it? Are companies doing it because they're being required to by government and government mandate, anytime you let a worker go, you have to provide a 100 hours of retraining?
Jeff Wald: Or they're doing it out of their own demand, because they can't get workers from the education system or from workers on their own to do it? Unknown, but I do know that if we don't do it, if we let those workers fall behind, if we let those communities fall behind, it has very, very negative implications and that's another very powerful lesson from history. We don't do it to our folly, to our death.
Jeff Bullas: And I think we've got to bring everyone along for the ride. If we think that we're just going to use cheap labor as cannon fodder, to feed the corporations' profit machine, and you did use some... I read a bit of your book in that area and that was, that the union started to protect the workforce from the abuse by the Henry Ford's and the others, that actually tried to basically use cheap labor and treat them like it's just a new form of slavery.
Jeff Wald: I would say that what we see through the history of work is an undulating power balance between companies and workers. Where the upper hand is traditionally held by companies and these three industrial revolutions, which bring in these huge step functions of technological change, mechanization, electrification, computerization, massively tilt that balance of power to companies. And companies tend to abuse it and then there are forces that rise to help workers, those forces are regulation, a social safety net and, to your point, unions.
Jeff Wald: And the role unions have played through the history of work is been a very, very beneficial one for workers. Now, we can argue, what's happened to the union movement over the last 50 years? Whatever time period you want to put on it. What gives me hope is the evolution of the union movement, and I think about something like the fight for $15, here in the United States, the fight for a $15 minimum wage. Right now, the federal minimum wage is $7 and 25 cents and it differs state by state.
Jeff Wald: The fight for $15 was a movement that was started in Seattle, by the SEIU, the Service Employees International Union, but it morphed, Jeff, it morphed into a grassroots activist, mostly non-union activist-led campaign. Which has led to several states, I think at this point, the majority of states, moving their state minimum wage up towards, none of them are at it yet, but towards $15 an hour. And so that is a powerful, powerful statement about how workers can unite in a common cause, because it's not the union movement per se, that's the movement that has... Or the entity, the union, as we know it, that has come and crystallized for workers. But it's the idea of workers bounding together to collectively enforce their power, to bring that power balance somewhat back into the harmony.
Jeff Bullas: Do you see that as one part of the solution, to bring that imbalance between the power of the corporation and the worker into place? What else do you see?
Jeff Wald: I do. I mean, I don't know if it's the union movement as it exists, because the union movement, as it exists, certainly United States has struggled mightily over the last 30, 40 years. Whether it's an evolution of that movement or some other structure, I think the other things that become very important here are the regulatory environment. And so whenever I give a speech about this, I'll always end up with a point you and I made earlier, which is predicting the future of work is hard, right? We don't really know what's going to happen, we don't know how it's going to happen, but we do get a ability to influence it, and especially those people that live in democracies. We get the right to choose the men and women that are going to sit and determine what the regulatory structure is, determine what the social safety net is, determine what environments the unions exist in, or workers' rights exist in.
Jeff Wald: And so I would point to the regulatory environment which, in the United States and in a number of other Western democracies, has been rolled back. And we can argue if those are good things or bad things, but the fact of the matter, they've been rolled back. And the fact of the matter is that happens a lot of time to the detriment of workers. That may be what we want as a society, but that is the point, it is up to us to choose. We can vote for the people that will change the regulatory environment and maybe make the minimum wage $25 an hour, right? We can do that, I may not have a position as to which is right and which is wrong, my statement simply is that we get a voice in how the world of work, how the future of work unfolds.
Jeff Bullas: Yeah. And you make some very interesting observations about regulation being part of a government's role in bringing equity to the table. And I'm in the lucky position, I'm grateful that as I've traveled through the world, America, Australia, UK, Europe, to see the different, I suppose, socioeconomic regulations and culture and society. And there's one thing I've really struggled with, when I've gone to America, is you go along and you go to a restaurant and tipping is what? 20%, 30% now, instead of 10%, it used to be. And as an Aussie, we do a bit of tipping here but the reason we don't do a lot of tipping here is because we pay our workers a proper salary.
Jeff Bullas: And the challenge I find tipping in the US, I'm an outsider looking in, I'm passing through and I'm going, "How much do I tip here?" Because it's not normal, in Australia, to tip 20%, 30%. And I'm going... Because the challenge I have too is, why doesn't the restaurant just pay its workers what they're worth, decent wage? Because I feel like the responsibility is on me to pay the waiter or waitress' wage, and I feel quite uncomfortable. I'm going, "I'm responsible for your wage so I feel guilty, how much do I pay you?" And service is part of the equation, I know, but I'm just thinking, "Why don't you just pay them a decent salary then we don't have this internal conversation?"
Jeff Wald: Some people, some restaurants are doing that. I know there are a number of restaurants in New York where the price of the food is a little higher, and I remember the first time you see it, it comes and you're like, "Where's the tip line?" Because I didn't even notice the food was more expensive, you're not paying attention. And they're like, "Oh no, no, our tips are incorporated into the price of the food, we all make much more on a per hour basis than we would at a restaurant so you don't need to tip." And it's not only you don't need to, you couldn't, there was no mechanism to do it. And it is one of those things that has evolved in the United States, much like the United States is the only industrialized country where your healthcare is tied to your employer. That is just something that's evolved here in the United States.
Jeff Wald: We don't need to do that, there are 4.4 million people employed in the United States as waiters and waitresses. We can simply change the laws and say that, "We're not going to do this," because they are allowed to do it, restaurants are allowed to do it and pay workers under the minimum wage, with their tips making up the difference. We can simply say, "No, that's not allowed, you have to pay them the minimum wage, no matter what and the tip is anything in addition," we can do that. We can make that regulation and we can increase their minimum wage to $15 an hour, could certainly do it. That is a choice that we, in the United States, get to make in electing the men and women that are going to change labor laws.
Jeff Bullas: And you mentioned health insurance. In Australia, we have a universal, you can go to a hospital, a doctor, and you're looked after. You know what? And I'm happy to pay a little bit more tax to make sure that the 10%, 15%, that can't look after themselves and every society is going to have that, what's wrong with making sure we look after the people that can't look after themselves?
Jeff Bullas: And then you've got the balance of still having enough incentive in the system, which you can do, but it's fascinating to watch the different systems. And the label's put against them globally so it's fascinating to watch. And I think that's what's the great power of travel, is to be able to look at society and the world with much more open eyes and gratefulness, that you can choose to live in different countries, well, to a point. But society can work in very different ways and neither right nor wrong, they just are, that becomes fascinating.
Jeff Wald: Well, hopefully we'll all be able to travel again soon in mass because, definitely, we have not had that opportunity recently.
Jeff Bullas: Yeah. I'm looking forward to it but we're doing a lot of local travel here at the moment. I went on a 16-day road trip up the coast of Australia.
Jeff Wald: Beautiful.
Jeff Bullas: And it was beautiful, we've got to some stunning beaches here, by the way, have you ever been to Australia?
Jeff Wald: I have not, I have a number of very dear friends from business school, who were constantly saying, "You've got to come, you've got to come," and at some point I will make that journey. I was hoping to, in this big break, now that I have left ADP, but unfortunately that's not in the cards right now.
Jeff Bullas: Right. Okay. Well, hopefully we'll be able to see you soon. I suppose, just to wrap it up, Jeff, with your book, The End of Jobs, how do you see... You talk about the big trends which is robots and AI. And you talked about the tension between who's going to do the retraining, is it a personal responsibility? Is it government? Is it the corporation? I would suggest that it's going to be a matrix or a hybrid of all three? I've certainly... Look, I'm 63, I've had to retrain myself. If I waited for the government to force a syllabus down my neck and go, "Jeff, you've got to reinvent yourself as a digital entrepreneur and learn blogging," that would never happen.
Jeff Bullas: The corporation wouldn't have done that because they wouldn't have any idea, it's that interesting intersection of responsibility and how it's going to happen. And you did mention, the other thing too, where it's essentially a retraining issue as it's going to be different types of jobs. Yes, some jobs are going to end and then others will rise, what are some of the jobs you see as rising?
Jeff Wald: I generally tell people, "Go hard, go either hard tech or hard human." The hard tech, Jeff, is easy enough to understand, right? Jobs in software engineering and data and AI and robotics, those jobs are growing. I mean, just non-stop, jobs are growing here tremendously. But the hard human is a little bit more difficult to understand, hard human are to do things that the robots and AI have no near-term capabilities of being able to do. Things that involve creativity, design, empathy, there are jobs in healthcare, there are jobs in sales and marketing and customer support, which were all predicted to be growing. Hard tech or hard human is generally a pretty good synopsis of the jobs that are going to be growing.
Jeff Bullas: I really liked that idea of hard tech and hard human. And there raises another challenge with this social media world we live in, is that the communication skills that are important to be a hard human, in other words, really full of empathy. What are your listening skills like? What are your communication skills like? Can you distill some complexity into simplicity and can you communicate that? Can you sit down and listen to someone's heart and soul? I think that hard human and certainly part of the book I'm writing looks very closely at what's also called soft skills, that's what you called hard human, I think.
Jeff Wald: Of course.
Jeff Bullas: Which is fabulous, I've never heard the term before. I think that's a great way to sum up where we're going, we're going to either hard tech or hard human. I look forward to it. I haven't completed the book yet, but I've certainly dived in a fair bit. And for me, I live in the middle of this evolution and change, I had to reinvent myself and I didn't sit around waiting for someone to do that, I had to reinvent myself. And the tools are all there, the information we have at our fingertips, the online courses you can do, but it really comes down to what's important is the ability to be willing to learn and to be aware, I think. And certainly, you must have been through all this, you're aware of... Read something that inspired you to start a business. What was the name?
Jeff Wald: WorkMarket.
Jeff Bullas: WorkMarket. You saw how it was all changing and it came from reading something from 1937.
Jeff Wald: True.
Jeff Bullas: And the reality is, humans don't change, in essence, the patterns are all there, we're primal. We want to put food on the table, we want to feel that we're okay, we're recognized. Just to wrap it up, Jeff, what would be one big takeaway that you'd like to share with our listeners, on the future of work and maybe the future of the world? That's a big question.
Jeff Wald: I would go back and say the future of work is very hard to predict, but it is ours to create. Get involved, get involved with your company, get involved in your community, get involved in your country and help create the types of future that you want for your world, because it is all wide-open and this future is yet to be written.
Jeff Bullas: It is. And the opportunities are there, we just got to take an idea and also take action like you just said, in other words, get involved. Thank you, Jeff, for a fabulous conversation where we went forwards and backwards and dived in on the edge of politics, on the edge of society, socioeconomic. And now you're involved in helping change the world with what you're involved in currently. And I hope that works out well because I think you are heading in the right direction.
Jeff Wald: Thank you.
Jeff Bullas: And thank you very much for your time and I look forward to seeing what happens in the next few months.
Jeff Wald: Thank you so much for having me, stay safe and be well.
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