Practical Wisdom from the Entrepreneurs Creative Edge by William Reed

Richard Nelson Bolles first published What Color is Your Parachute: A Practical Manual for Job Hunters and Career Changers in 1972, and annual editions have come out each year since, having sold over ten million copies worldwide. It has become know as the Job Hunters Bible, which is the name for the official website as well, http://www.jobhuntersbible.com

It has proved to be a perennially relevant publication over nearly four decades, and the author is widely recognized as the leading authority on job-hunting. With the Internet and Social Media many of the tools and strategies have changed, but the metaphor of the parachute remains powerful. It ties together many of the elements of preparation, decision, and direction that lead to a safe landing.

Now along comes Free: the Future of a Radical Price, the New York Times bestseller by Chris Anderson (http://budurl.com/yund). This book identifies an old wolf in sheep’s clothing, the process of commoditization, whereby goods and services become so cheap to produce and deliver, that prices drop dramatically, approaching and achieving the ultimate radical price of zero.

The book is instructive, because it shows how businesses can actually make money by giving away products and services for free. Airlines offer customers free travel as a reward to frequent flier miles, but also because they can cut costs, negotiate lower access fees for traffic, increase baggage handling and beverage fees, and charge higher fares on popular days. Highly profitable companies like Google make money through services like Google AdWords, but essentially deliver all of their content and access to end users for free. In the experience economy it has become standard practice to offer free trial runs for software, because many people will not buy without being first able to try. The barter economy enables people to exchange goods and services without spending money. Though illegal, pirated software is free to some, and sold to others at prices below the authorized version.

While the trend toward free benefits consumers, it raises huge challenges to those who are dependent on revenues from products and services that people want to use, but do not want to pay for. This affects every industry from manufacturing to dentistry, from consulting to salaried work. If you are dependent on a single income stream, whether it is a single product or a salary, then you are at risk. Sooner or later, someone will apply pressure to bring prices down, or ask you to do more work for the same or even less money. They may even try to barter with you saying that although the work doesn’t pay, it will give you credibility, exposure, or experience. While this may be potentially true, it will only come true if you have a strategy.

The strategy is how you pack your parachute, in a way that slows down the process of free fall, and enables you to make a safe landing. With the right skills and equipment, you can even navigate your parasail and ride the wind to a better location. Considering that at some point in your business or career, you may jump or be pushed into the process of free fall, it makes sense to learn how to pack your parachute.

One way to do this is to refuse to lower prices or compromise to price pressure. The only way to do this and still keep the business is to add value, rather than reduce fees. All things being equal, people will select the commodity with the lower price. Therefore, make sure that all things are not equal, by providing an offer of value that they cannot refuse.

When you are comfortable and competent, you may feel like a big fish in a small pond. However, when you move to create value in new fields, or try to add new streams of income, you may feel disoriented, like a small fish in a big pond. This is the time to remember the Zen proverb, The small fish swallows the big fish. It has many layers of meaning, but in this context it means that you have to learn how to earn your way in new territory. How you act today determines what you become tomorrow. This is how the child is father to the man.

Your value is not just what you did in the past, your education, your job experience, your curriculum vitae. Because employers, like consumers, want to see and experience what you say you can do. You need to create and demonstrate value every day, in your attitude, your questions, your energy, and your contribution. As part of your strategy you need to create a platform, such as a blog or website, and find ways to leverage your value so that you get paid and appreciated at the end of the day. There is nothing new about needing to pack your parachute. It is just that now you do not have a choice.

William Reed

WEBSITE: http://www.williamreed.jp

WEB TV: http://williamreed.tv

NANBA: http://www.nanbanote.com

JAPANESE SITE: http://www.reedcom.jp

BLOG: http://www.EntrepreneursCreativeEdge.com