Unless You Are Awesome, You Will Be Outsourced

10/5/11

We’re quickly moving to a new world where the wealth gap is compounding and increasing. We’re moving to a world that is going to look a lot like Hollywood: a few people enjoying insane success … and everyone else spends their days waiting tables.

The delta between A-players and B-players in companies has always been high. A-players get promoted faster and they earn more. My guess is that an A-player earns about 30 percent more than a B-player in that same position for most professions. An A-player administrative assistant usually can earn about 30 percent more than a B-player in the same position. That’s a significant difference and even more when you compound that difference in savings and lifestyle over the course of one’s career.

In some professions like sales and entertainment, an A-player might earn 300 percent more than a B-player and essentially live an entirely different lifestyle. In the future, everyone’s jobs will look more like salespeople.

Let’s focus on the profession I am most familiar with: software engineers.

Today, an A-player software engineer has a lot more job prospects than a B-player. That seems obvious. But there are plenty of B-player and C-player engineers that work at great companies and get paid well. Their services are needed and important. And while they don’t make the contributions that an A-player makes, they still are very valuable to a company and have a lot of importance to the success of an organization.

But things are changing (queue in the Darth Vader music).

There are three forces that will drastically change work, compensation, and our value to each other forever:

1. A productivity boom will automate B- and C-player work.
2. Globalization will commoditize B- and C-player work.
3. A-players can have much more impact.

The productivity boom will automate your job.

Everyone is massively more productive today than they were just a few years ago. A salesperson can use tools like Salesforce.com to track customers, LinkedIn to find prospects, and they can easily call and send documents from the road with their iPhones (unless they are on AT&T). The Internet makes all of us extremely productive and automates parts of our jobs.

In the 1990s, I was a software developer and I remember writing a script to determine if a string was a valid e-mail address. It took about 12 hours for me to write. First, I had to research what could and could not be in an e-mail address (dashes are ok, commas are not, only one “@” symbol, etc.) and there were a bunch of corner cases that I had to guard against and test against. After coding into the night, I finally came up with something I was proud of.

Today those 12 hours of work would take about 1.2 seconds. There are hundreds of libraries that have been written by really smart people and tested by thousands of programs. All one has to do is … Next Page »

Auren Hoffman is CEO of Rapleaf and an active angel investor in over 30 technology companies. Follow @

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  • Fred A

    Auren,

    Very interesting article. I agree with many of the points you make. I’m in the R&D pharma/biotech world and the same principles apply – harsh as it may sound.

    While this may not be the best thing for our local economy, on a global scale its a good thing.

    Btw, see you October 16 on the field!

  • Anonymous

    I’d have to disagree with you a bit. In many instances, particularly smaller organizations there is an incentive to work towards being an A player but the same is not true in the giant corporate world.

    In a large corporate environment, especially when one is in engineering and not sales, the A players and B players make very similar incomes if not exactly the same. Especially when there are freezes on raises and promotions, common throughout the corporate environment today.

  • I.D.

    Mr. Hoffman, congratulations on a great albeit solemn article.

    Fred, I am in the same field and this is definitely applicable to our industry. Promoting and rewarding the most capable people is after all an application of natural selection in a way, however the social inequalities that will result if this is done in a massive, global scale will be difficult to handle.