Not So Distant Cousins – The Story of Uber and Supercuts

über and supercuts

A late adopter, I recently had my first Uber customer experience. I was actually tagging along with a friend who hailed a ride to the airport in about thirty seconds on his phone. He never took his wallet out. It was impressive. Uber’s current value of $60 Billion is even more impressive.

Trends involving how people work in Washington are evolving quickly. Katy Steinmetz’s Time magazine article describes the gig economy, the on-demand economy and certainly the sharing economy. Consumers who want certain things (products and services) are connected to other individuals who offer them for a price. Rather than an employer like Boeing hiring W-2 employees, technology platforms like Uber have created software that brings people together at a lower cost and greater convenience than through traditional taxi companies. Uber is one of the fasted growing start-ups ever. And, it’s not social relationships and the greater good. It’s about the efficiency that technology can create. So, the sharing economy might be better described, the Access Economy.  Uber isn’t really sharing much. It is providing access.

For those providing services in the Access Economy; flexibility and independence are top reasons to enter the space versus traditional employment. Most of these folks have more than one source of income. Some struggle to make as much money as they did as employees, others thrive with no limit on their income. A low barrier to entry creates lots of competition that further drives the price down.

So, what does all this mean to someone in Washington considering a career re-invention and investment in a proven franchise model like Supercuts? A white collar franchisee candidate wants the same things – financial independence and flexibility. If they can find a franchise investment opportunity where their strengths and experience can be leveraged in a way that creates reasonably predictable results and financial return that can be a very compelling career option! However, the barrier to entry is not only the up-front franchise fee. It’s having the competencies and temperament required to be awarded a franchise in the first place. As a specialist in franchise operations, my work resembles a good executive recruiter looking for the best matches possible. The right fit drives success.

The ongoing royalties in exchange for the rights to use a brand name like Supercuts and for access to proprietary systems and technology bear striking resemblance to the commissions drivers pay to Uber corporate. But the initial and on-going support and training from the franchisor to ensure the brand is protected through consistent consumer experiences is a big difference, among many. If you are considering a different career path, think about control over your own future – do you want it and how much you need to be happy.

I am facilitating a business ownership forum workshop on Tuesday, March 2nd in Mercer Island. To register for this event and learn more about no-cost local expert franchise advice in Washington from Charlie Magee and FranNet of Washington, visit: http://wafranchiseexpert.com/calendar/.

3 Reasons I Loved “The Big Short”

thebigshort

For movie fans, this is the season when all the good stuff is released. Good stuff means good stories. Stories that move you. Last weekend my wife and I saw “The Big Short”.  The setting is the lead up to the 2008 financial collapse and start of The Great Recession. It is not a win-win story. Very well told, it is mostly about the recognition of greed and ignorance, and the opportunities brought by that recognition.

Unfortunately, you know how it ends. EIGHT MILLION American jobs were lost! I am willing to bet you or someone you know was affected and have some scars to prove it. I certainly do.  Ironically, the same type of instruments that were the poison of the housing crisis and recession have re-appeared with different names. Instead of “Collateralized Debt Obligations” investors are lured by “Bespoke Tranche Opportunities.”

George Santayana famously said, “Those who cannot remember the past are condemned to repeat it.” So, here is what I have learnt from my experience and from the movie.

  • Bet on Yourself

When the movie was over and my wife and I were back in the car, I looked at her and said, “that brings it all right back.” I got a little choked up. The “all” that I am talking about is losing my job, half my retirement, and some of my confidence.   The sheer panic, the fear, the anger, the humiliation, I kept it nearly all within myself. Hey, I had a family to support who were counting on me. I was counting on me, too. After all, over the course of 40 years I had built a self-belief that I was an honest, loyal, smart, hard-working guy who treated everyone with respect. There was just no way that those qualities had become liabilities. And if corporate America didn’t value me, then I would go it alone. Be myself, work hard, and make it happen. I was willing to bet on myself.

  • Do Your Homework

The characters in the movie were swimming up-stream, to say the least.   It’s more like they were swimming up Niagara Falls. But they did their homework and held strong to their self-belief. Michael Burry (played by Christian Bale) spotted the imminent collapse of the housing market by looking at EVERY loan in an investment instrument. It was thousands and thousands of individual mortgages. Nobody had ever done that. When he peeled it back and saw all the defaults, he knew what was going to happen. Mark Baum, played by a fat Steve Carrel, sent his team to Miami to tour neighborhoods and talk to strippers that owned five houses. He wanted to know if it was “real.” There is just no substitute for making your own phone calls, visiting locations and understanding EXACTLY what you are getting into. When my clients are considering investing in a franchise in Washington, I coach them through a rigorous due diligence and research process.

  • Circle the Wagons

In the car after the movie, my wife was quick to point out how well we had survived two job losses. Though the retirement accounts had been cut in half, we had worked hard to keep saving and managing our expenses. We never missed a mortgage payment, and we had bought within our means. Sitting in the title company office in 2005 signing our 30 year fixed mortgage, they kind of laughed at us. They said they hadn’t seen a 30 year fixed mortgage deal in months. Perhaps it was our upbringing, but it was the only thing that made sense to us. My wife is good at making me feel better about things. She wasn’t initially excited about my decision to not pursue another corporate management position. She liked the regular paychecks. But she could feel that there was no way I was going back to that life. I knew I could do something more independent, I did my homework, and I enjoyed her support and unconditional love. I was unwilling to be anything, but successful. Now, encouraging future entrepreneurs as a living is a great fit.  I have never been happier or felt more useful.

I coach my clients, who are considering leaving a corporate job, to pursue their dream of owning a successful business in Washington to remember these things. Believe in yourself, do your homework and ensure you have your family’s support. The goal is to make the decision to become a business owner with complete confidence and clarity. And the right decision may be not to invest in a business of your own, at this stage. You may need more skills or money. If it does make sense and we find the perfect match together – maybe in a recession-resistant category, the only smart bet will be to go LONG on you and your business.  I’m betting on you, too.