Entrepreneurship is the path to the distribution of wealth
Just a little something to make your wheels spin: As of 2014, there is approximately $80.9 Trillion in cash on earth and there are approximately 7 Billion people in the world. That averages to about $11,557 per person worldwide.
Who want’s to be an entrepreneur?
Ever since I was a little guy I knew my answer to that question, I wanted to control my future and be my own boss. When all the other kids wanted to be policemen, firemen and professional wrestlers, I wanted to be a dentist. When I imagined my adult self as a dentist I always envisioned running my own practice. Later when I decided I wanted to be an architect sometime in middle school, I wanted to have my own firm. In high school when I decided I wanted to be a rapper, I wanted to have my own label from the beginning, Drastic Dynasty Ent. or DDE for short.
Later, when trying to commit to a particular career field, I realized I wasn’t interested in anything that wouldn’t allow me to run my own show from the beginning. Maybe this is the result of my infinite dislike of authority, maybe this is the result of me being a pioneer and the captain of my own ship…I’d like to say it’s a result of all three. Truly, it’s due to my generation’s shared mindset, the D.I.Y. or the do it yourself mindset. There are currently about 400 million entrepreneurs in the world, but by the year 2020 it is projected that there will be 1 billion entrepreneurs world wide. That’s on average an additional 100 million people every year, who will start their first business.
If you look around, many industries that in the past were run by a few major corporations are being broken up by today’s entrepreneurs. Let’s take the music industry for example. Many of today’s artists are opting out of record deals and are guiding their careers without the resources from record companies. What does this mean for the artist? More control over the content they distribute, their public image and the individuals that are a part of their staff. They definitely work much harder than the artists that are fueled by the machine, but because there are less hands in the pot, in the end the artist pockets more money. An artist that is signed to a record label pockets about $0.25, and sometimes less, per record sold. In addition to that, 99% of the time they don’t “own” their music. And now that record sales are a joke and barely any record companies make traditional money selling them, most record deals are what they refer to as 360 [Three-Sixty] deals. Where the record label not only wants a piece of an artists record sales, but an artist’s performance income, income from sales of merchandise and any endorsement deals as well. The artist that does it without the “helping hand” of the record label keeps all of the income from their performances, merchandise sales and endorsements. In addition, they make a lot more money per album sold…a lot more. An unsigned artist typically pockets, depending on how the album was distributed, roughly $5.00 per album sold. This means that an artist with a major record deal that sells 1,000,000 records, which is incredibly rare in today’s climate, makes the same profit as the unsigned artist that sells just 50,000 records.
Now you can apply this same model to any industry; sports, hospitality, technology, retail, manufacturing, you name it. Where most of the costs of a product or service comes from the position the middle man holds, many new entrepreneurs are finding their profits.
There is a cafe in San Francisco that I frequent often, that has encompassed this ideology by opting out of the traditional system of operating a cafe. Traditionally cafes have made deals with local coffee distributors to supply 100% of their beans, but Ritual Coffee Roasters has gone the extra mile. Ritual Coffee Roasters deals directly with coffee producers in developing economies that they have met personally and given a high five. With applying the D.I.Y. method and finding their profits in the traditional costs, Ritual Coffee Roasters is able to buy coffee at a much cheaper price than traditional boutique cafes. In addition to low costs Ritual has control over the quality of their beans, their branding, and the experience of their customers and employees. Ritual employees have health benefits among other benefits that traditionally only big-chain cafes, like Starbucks, have been able to afford.
There’s a lot of opportunity and money in the switch from taking an industry that is traditionally ran by a few Goliaths, to being ran by a lot of Davids. Entrepreneurship is the way to the distribution of wealth in this country and others. Who wants to be an entrepreneur?