implications and opportunities for entrepreneurs
free agency and the new economy

According to author Daniel Pink, a free agent is a person who works untethered to a big company or large organization. They include the self-employed, freelancers, e-lancers, independent contractors and dozens of more colorful names like 1099ers and techno-cowboys. Pink’s new book, Free Agent Nation, tells the story of a fundamental shift in the way people are viewing their careers, as well as the commensurate economic shifts. At this Morino Institute Netpreneur Coffee & DoughNets meeting held June 20, 2001, he talked about the implications and opportunities that the movement presents for entrepreneurs.  

Statements made at Netpreneur events and recorded here reflect solely the views of the speakers and have not been reviewed or researched for accuracy or truthfulness. These statements in no way reflect the opinions or beliefs of the Morino Institute, Netpreneur.org or any of their affiliates, agents, officers or directors. The archive pages are provided "as is" and your use is at your own risk.

Copyright 2002 Morino Institute. All rights reserved. Edited for length and clarity.

mary macpherson: introduction

Good evening and welcome to Coffee & DoughNets Goes Late Night.

            Last month's Coffee & DoughNets was about “Cramdowns, Ratchets and Other Four Letter Words,” which showed that there’s a whole language being created around early stage funding and some of the perils that are now associated with it. Tonight we're going to explore another new language, and we're going to talk about something that is happening--I'm not sure exactly what the right descriptor is, whether it's a movement, a cult, a tsunami--but it represents a sea change in how work gets done, where it gets done and who does it. There is a new supply chain, and some of the terms you'll hear tonight are “entreprenetworks,” “free agent operating system” and more. Woven throughout are some fundamental values that are not new at all.

            We first met Dan Pink about two years ago, right after he started talking about the "Free Agent Nation" in Fast Company magazine, and before he went off to write his book. He joined us right here in this room for a Coffee & DoughNets in October of 1999 that we called “Newsapalooza,” and that featured a panel of journalists discussing public relations. Now he's back, the darling of the book party set, and we were delighted to see that the word used to describe one of his recent parties was “Bookapalooza.”

            According to a recent Washington Post article, 11,000 workers have been laid off by companies in the Metro region in the last nine months, yet there is only a 2% unemployment rate. As Dan will tell you, the "Free Agent Nation" is exploding, and perhaps there is a correlation there, but before I turn the podium over to him, I'd like to thank the volunteers who came to help out tonight, Roger Erickson of 270Tech, Penny Sullivan of Open Systems Associates, Dan Cole of 2SG and entrepreneur Stephan Tibbs. Thanks very much for helping us with this event. Thanks also to independent bookseller, Politics & Prose, which is here tonight with Dan's book and a table outside where he'll be available to sign it. Dan is going to donate his royalties for all books sold here tonight to Suited For Change, an organization that raises money for clothes for women going from welfare to work. We'd also like to thank our partners TVWorldwide.com, who shoots and hosts our streaming video, and MAD Events & Productions, who works on the audio.

            Now I'll turn it over to Dan who is going to regale you, I'm sure. He has lots of props, and I think you'll enjoy it.

dan pink: the free agent nation

All right. I'm going to go about this in a slightly different way than your typical business presentation. For starters, I don't have a PowerPoint presentation. I want to tell you some stories, draw you some pictures, show you some film clips and, depending on my mood and how much you laugh at my jokes and applaud my words of wisdom, I have some fabulous prizes to give away.

            I don't know how many of you read my bio, but, for awhile, I worked for Al Gore. Anybody remember Al Gore? (Laughter.) Curiously four years ago almost to the day, I walked into Al Gore's office (I was working for him; I wasn't stalking him) and quit my job. He asked why and I said, "Well, sir, it's clear that neither one of us has any long-term job security." (Laughter) No, not really. I went into this kind of sad tale about how the job was eating me alive. Even though it had all the outward attributes of coolness and prestige and so forth--everything from meetings at the vice presidential mansion, to trips aboard Air Force 2, to chance encounters with Wolf Blitzer--the truth was that I was miserable because the job was all-consuming. I was grateful to have had it, but it was eating me alive. I had no control over my time and no control over my life. My wife and I had a daughter who I never got to see, and I was just flat-out miserable, so I quit.

            He asked me, "Do you have a new job?"

            "No."

            "How are you going to support yourself?"

            “Well, I don't know. I think I'll figure it out. My wife still has a job.”

            What I didn't tell him was that it wasn't only that job, it was jobs in general that I think were getting me down. I figured that I'd try a little experiment. I’d go up to the third floor of our house in Washington, DC--we live in American University Park in one of those small colonial houses that all have attics. I fashioned an office out of ours and I said, "I'm going to give it a shot. I'm going to try writing speeches and articles for anybody whose checks will clear.”

            One of the first things I did was to get a contract with Fast Company magazine where I'm a Contributing Editor. I said to my editors at Fast Company, "It seems that a lot of people are making this decision; a lot of people are going out on their own. It sounds kind of cool. How about if I check it out and write a story about it?” Well, I did it, and that story was called "Free Agent Nation." It appeared a few years ago, and a curious thing happened afterwards. Two things, actually. One, I got more email on that story than all of the stories I had ever written in my entire life combined. It was extraordinary. Every time I would hit "refresh," there would be another flood of emails coming in saying, "Oh, that is what I do! This is me.” or “I'm stuck inside a large organization. This is what I want to do."

            This is going to sound like a joke, but it's really not. They said, "Oh, my gosh, thank you so much! I sent the article to my mother who has no idea what I do and doesn't understand how I could make a living without having a job.”

            Second, there was a curious reaction in what you might call the “elite press.” The New Yorker magazine (I was astonished that anybody at the New Yorker read Fast Company) said, "It's about the end of loyalty in America." It went on, "The manifesto about the end of loyalty in America was written by a man named Daniel Pink." I thought, “What? I'm just trying to make a buck here.”

            “Manifesto about the end of loyalty?" They didn't mean that in a nice way.

            A national newspaper ended up writing about the story saying something to the effect of, “Free Agent Nation, what a bunch of crap. This can't be right, and this Dan Pink ought to be on Thorazine.”

            How many of you are on Thorazine tonight?

            Actually, it's tragic. Thorazine is a drug for people who have hallucinations from, say, schizophrenia or really bad acid trips. This national newspaper was saying that I ought to be medicated for my hallucinations. I don't want to tell you what newspaper it was because the guy from the Washington Post isn't here to defend himself. I said to myself, "Well, I'm obviously on the right track because hundreds and hundreds of people out there who actually work for a living, who do great things, who are creating the economy, they’re saying, 'Right on.'" The stodgy, established, elite press was saying, "Oh, no."

the truth, or something like it

            I started doing research at the Bureau of Labor Statistics and other government agencies and realized that we know nothing about this nation of people out there. I thought, "How does any nation endeavor to understand itself?" It goes out and takes a census, so that is what I did.

            My census was modeled after the 1790 census, which Thomas Jefferson ran . . . This is not a joke. I'll tell you what, I'll raise my right hand when it's a joke, and my left hand when I'm being serious.

            My census was modeled after the 1790 census. Thomas Jefferson ran it. He was the Secretary of State at the time, and it was the first census of the United States of America. Think about conducting a census in 1790. You don't have the Internet, you don't have telephones. What he had was 17 federal marshals on horses who went out and basically wrote these little notations about how many people there were and what they were all about. When he delivered the results to President Washington, he said, "Here are the results, Mr. President. I have the things that I know are right in black, and over here, in red, these are results that I think are . . . (and it's a lovely phrase) . . . very near the truth."

            I said, "You know what, I'm going to do a census of Free Agent Nation and give results that are very near the truth." I went out for a year and I interviewed hundreds and hundreds of people. I went on the road with my wife and our daughter, and then another daughter, yes, our own daughter, and I interviewed hundreds and hundreds of independent workers, freelancers, “e-lancers,” self-employed professionals, independent contractors, interim executives, temps and “microentrepreneurs.” We traveled all over the country. I met them in libraries and Starbucks and hotels and Starbucks and Kinko's and Starbucks. I fashioned those “very near the truth” results into this book.

            How many people have read this book?

            I fashioned it into this book, Free Agent Nation, and I want to tell you a little bit about what I found. I want to talk about the numbers very quickly, and I want to talk about how this happened because I think it illuminates some of the challenges for small entrepreneurs. I also want to talk about how it's fundamentally changing the American work ethic. As Mary said in her introduction, that set of values might be among the most profound, significant and enduring changes. I want to talk a little bit also about how it works, both the attitudes of how it works and the mechanics of how it works. If you look at the mechanics, there are some incredible business opportunities. I actually think that I can come up with five or six business ideas to throw out to you if anybody wants them.

            And I have prizes.

inside the numbers

            The federal government divides workers today into two categories. The Bureau of Labor Statistics which produces the unemployment numbers--the figures that rule the markets--divides workers into two categories: farm workers and non-farm workers.

            Anybody here in the non-farm economy? (Laughter) They're a little bit behind in how you count this.

            It is actually through no fault of their own. The agency has some wonderful people there. I actually worked at the Department of Labor for a couple of years and there are some great people at the Bureau of Labor Statistics. They're under-funded and they don't have the resources to get the job done. Part of what is going on is that work is changing so fundamentally and so swiftly that our capacity to describe it and our capacity to count it is way, way behind. We're kind of searching for a new vocabulary and a new way to count, so I'm going to give you some very quick numbers.

            I have my own taxonomy of free agents. There are three varieties. One is what I call soloists. These are your typical freelancers, the independent professional, the person working by him or herself, migrating from project to project. I mentioned the vocabulary, here are some great names that have come up for these sorts of people: freelancer, e-lancer, independent professional, independent contractor, consultant (which at one point was a euphemism for “unemployed white collar worker” and I think it has become that again) techno-cowboy, hired gun, lone ranger, guru, nomad, gypsy cab driver, information backpacker, lone eagle and (my favorite) 1099er. Only in America would you give people a nickname based on a tax form.

            The estimates vary all over the place, but there are about 16 million of these people.

            The second group are temps. We all know what a temp is. There are two kind of temps: high-end temps and low-end temps. Low-end temps have miserable lives. They work for meager wages in terrible conditions. They want to get a real job. They are among the most disgruntled workers in the American work force. There are also high-end temps, such as interim executives and interim nurses. There is a company out in Walnut Creek, California, called CFOs-To-Go that provides interim CFOs. I interviewed the CEO. There are about three million temps.

            Last are microbusinesses. These are very, very, very small businesses. The federal government says that a small business is fewer than 500 employees (again, its notion of a small business is a little bit outdated). That is one definition. Another is fewer than 100 employees. Well, throughout this country there are legions of businesses with two employees, one employee, three employees. Here’s a startling factoid for you: 70% of business enterprises in this country have no paid employees.

            A very conservative estimate is that there are 13 million microbusinesses. A lot of them are operating at home. Some are second ventures for people. Many fly beneath the radar of the authorities. No, I don't mean criminals, I mean somebody who says that they’re going to moonlight fixing people's computers, get paid in cash and not declare it as income. Like that guy in the second row. (Laughter)

            You add this up, and you have 33 million people who are independent, untethered from a large organization. That is almost one out of four workers.

          As Mary said, I am a former speech writer. When someone says, "Dan, what makes a good speech?" I say "Three things make a good speech: brevity, levity and repetition." Let me say that again: brevity, levity and repetition. Thirty-three million people, nearly one out of four workers. Thirty-three million people, nearly one out of four workers.

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