Unless You Are Awesome, You Will Be Outsourced

10/5/11

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plug one of them in. It is simple, easy, and effective. Now I can spend the remaining 11 hours, 59 minutes, and 58.8 seconds on something more useful.

Thanks to the open source trend, even complex projects are free and quick to set up. My company, Rapleaf, runs all of its systems on an open-source framework called Hadoop. Hadoop is something that took hundreds of thousands of hours to build. And we get access to this software for free.

All this means that it is faster than ever to implement good ideas. Instead of investing resources in implementation, companies won’t need as many engineers to get a project done. And if implementation is cheap, companies can spend more on ideas instead.

Globalization will commoditize your job.

There used to be a few people in your town competing for your job. All you had to be was better than those few people and you were golden. And even if you were not the best, you were still needed. Today there are millions of people competing for your job.  While there are very few amazing developers, there are millions of good ones. There are tons of people that can write decent code, integrate with APIs, and get stuff done. And they are all over the world and they want your job.

And globalization will continue to accelerate. Historically, the biggest missing piece to stopping a world where you can be outsourced at any moment was the technology to collaborate. Today it is massively easier to collaborate in person than through any other medium.  But that’s changing.

Even simple tools like ubiquitous video conferencing via Skype, project management systems (like those developed by 37signals), and easy screen captures have made a world of difference. Many more communication solutions will be developed—and once we can easily collaborate with someone 12 time zones away, then your job can be more easily outsourced.

A-players can have much more leverage.

Because of globalization and the productivity boom, implementations will be cheaper and easier. B- and C-players will be commoditized and their salaries will fall.

At the same time, the value of A-players will rise exponentially. The typical A-player spends 5 percent of her time today figuring out what needs to be done, and the other 95 percent executing it. When I started working on my script to detect valid email addresses, it probably took me a few minutes to figure out what I wanted, and then hours to actually get it done.

But imagine a world where execution is cheap and fast. An A-Player can implement dozens of ideas in the time it now takes to implement just one.

That means the people who can figure out what needs to be done become much more valuable.

So, I can be outsourced.  Now what?

Over the next generation, we are moving to a world where most (like 90 percent) software developers will earn a decent wage (say $50k/year) and a few (like 10 percent) amazing developers will earn over $500k.  Yes, the income distribution for the same profession of people who went to the same university and had the same SAT scores could actually be that stark.

I want to point out that I’m not advocating that this divergence in compensation happen. I’m not. It has the potential to fracture society. And it seems like it will massively reward people that have lucky breaks. But I’m worried that regardless of how we feel about this growing division between the A-players and B-players, it will happen anyway.

This stark division is already happening at companies like Google. Most engineers there have similar backgrounds and all get paid well. But a few of the amazing engineers earn compensation over ten times the average. Yes, 10x. One day, every company will look like Google.

So what do you do about it?

You must be the Jedi Master of your profession.

Unless you are awesome, you will be commoditized.

Here are some things that will be less valued in the future and some things that will be more valued:

Less-valued More-valued Why?
General knowledge Judgment Search engines will be attached to our brain
Knowing more than one major spoken language Sales in any language We’ll have universal translators
Coding Art Building things will be much easier.  Designing aesthetics will always be hard.
SAT scores Combining left-brained and right-brained thinking Systems-thinking will be easier to outsource
Majoring in business Majoring in philosophy Learning to “think” will be more valued that just learning

This post first appeared on Auren Hoffman’s blog Summation. Special thanks to Jeremy Lizt, Paul Santinelli, and Travis May for their help in writing this.

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.