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Examining YOLO-economy ins and outs with Pavel Shynkarenko the founder and CEO of Solar Staff company.
We talk to startups and investors, you get the value.
YOLO-economy (from the famous worldwide phrase “You live only once”) is a phenomenon that thunders to irrevocably change the labour market. Even more, the whole concept of human labour. It includes many trends: refusing sustainable employment in favour of the favourite occupation, the spread of the freelance, the focus on self-fulfilment among Generations Y and Z, experimenting with basic income integration. All these are part of one big social process. We’ve talked to Pavel Shynkarenko, the founder and the CEO of Solar Staff, about the reasons for the YOLO-economy emergence, its influence on business and the global changes in the world.
— How did you understand that YOLO-economy is a real social trend?
— I guess that happened in Holland during a pandemic, which got hold of me in Amsterdam in one of our units, and as a result, I had to stay there from February to September. Holland is a mega-social state that provided financial support to its citizens during this period. People gained confidence in the future: even such a “black swan” as the coronavirus didn’t undermine their well-being. The number of daily tasks decreased and people started thinking "broadly": what’s next, what do they want. Someone decided to do what they love, someone to start a business or develop natural talent. People realized that they needed work not to survive but to live a better life. This trend has existed in developed European countries before, but the pandemic has become a kind of catalyst.
— Are the experiments with integrating the universal basic income in some European countries a part of this trend?
— Different countries are now only trying this concept: sooner or later, with the development of automation, universal robotization and economic growth, the state will be able to meet the basic needs of citizens. And then people will be free to choose a job to realize themselves, to have fun and, thus, to get even more freedoms and opportunities. A person no longer needs to work to survive; this is an essential basic change.
— And what about the YOLO-economy in emerging markets: in Asia, the Middle East, and even here in the CIS?
— As for the CIS, we also still need to work to survive. So far, some countries are ahead of the curve: they are an example of what will happen to the labour market in the coming years. But everyone, one way or another, is moving in the same direction, including the post-Soviet countries. Moreover, in some cases, developing countries will be able to travel this path even faster and more efficiently. Let me give you an analogy: today, Russia has one of the most developed banking systems in the world. Why do you think?
— Complex infrastructure?
— New infrastructure. It was created recently since we started building it much later. This infrastructure is both easier to maintain and faster to develop. The same goes with developing countries: perhaps they will step over several steps at once. There is such a chance and whether they will take it or not is another question, because we are talking not only about technologies but also about people and societies. You cannot build a high-tech free society in an unfree country.
— The question is from the category of “What was first — the chicken or the egg?”: is the development of technology predetermined the emergence of the “You only live once” philosophy? Or is it vice-versa, people were thinking about how to free some time for their hobbies and were masterminding new technologies?
— In fact, both are consequences. Everyone is familiar with Maslow's pyramid of needs: the development of society leads to the fact that this pyramid is "overgrown with ivy." When the basic needs are met, and this becomes the standard, a person can start right away from another step. The development of society is the reason for the change of the approach to work. Indeed, in addition to technological progress, there is also social progress. It may not be accelerating as fast, but it just can't be stopped.
— In your column, you write that the absence of economic shocks in the world after 2008 played a significant role in the development of the YOLO-economy. But what if they do happen within the same country? Will there be a rollback, in an era when sustainable employment is more important than finding a vocation?
— Maybe I’m over-optimistic, but even if a story like a pandemic didn’t lead to a collapse, I think we will survive any small recession. Let's take a person living in Russia: if suddenly the economy here becomes really bad, nothing will prevent him from entering the international labour market. Sell your talents to foreign companies, get some currency and keep the opportunity to do what he is good at. Rollback is possible but on a local level along with some kind of isolation.
— The advantages of YOLO-economy for business are quite obvious: a great choice of qualified specialists, it is possible to optimize expenses by the outstaffing… But most probably, there are disadvantages?
— They are always some. The most obvious difficulty: the requirement for management is changing. According to a recent PwC study, there are about 14 million freelancers in Russia and 7 million of them are highly qualified specialists. So, about 10% of the working population is already working within the framework of the YOLO-concept. Now managers within the company must learn how to manage hybrid teams consisting of permanent workers, remote workers, and freelancers. Often, especially in large companies, management is a mix of well-established business processes under the motto “If it works, you don't touch it”. Now, it turns out the opposite: if you don't touch it, it will stop working.
— Is it possible that YOLO-thinking, which presumes the constant search of yourself, can become leverage for a company? Let’s say, a key employee decides that he has to change everything in the middle of a major project and leaves to meditate on Bali...
— The question is what are you counting on. Personally, I work in an industry where everything is changing too quickly to count on any kind of stability. 10 years ago, no one would have said what the situation in our industry would be like today. In such a situation, the problem that some of the employees drop out is a minor problem.
— Of course but if this happens again and again, then it becomes a real problem.
— It is important to maintain a stable core of the company: a team that retains and transfers knowledge about business processes and about your product. And there are no contradictions with the principles of YOLO-economy: if the people in the “core” do what they love, and this drives them, then eventually, you only win. But to select, and most importantly, to keep such a team is more difficult and more expensive. Let's look at the IT industry: all these option programs, participation in decision-making, bonuses: everything is done to make it interesting and profitable for key employees to continue working in the company.
— Is it possible to say that this is the business model of the future: the "core" of the company is made up of like-minded employees, and around them is a system of project specialists and freelancers?
— Let's have a look at successful Internet services: almost all top management employees are minority shareholders. In other words, the people who are the core of the company somehow feel that this company is theirs too.
— Today we talked about IT companies, fintech, e-commerce — about advanced high-tech industries. And what about the companies of the so-called real sector: will YOLO-economy be able to appear in factories and plants?
— I can put it like this: we will try to bring the digital transformation of contracting relationships into the industry. We plan to start working on the corresponding product this fall. We will try to give a tool, so the companies integrate into this process and don’t end up left behind. And whether it will turn out or not depends on them. Again, if we are talking about the industry, there has recently emerged a new profession — the director of digital transformation. Several years ago, no one heard of such people, but now they do exist and we work closely with them.
— From the point of view of society, what are the main reasons to spread the YOLO-economy?
— The reasons are quite simple: increased income, increased life expectancy, ease of changing jobs. Let's compare Moscow in 2001 and 2021. Take a person who has lost his job and supposedly has no qualifications and no savings either. What is the difference? In 2021, he will be able to receive income within a maximum of 2 days: he can work as a courier, deliver something, and so on. All this platform employment and the development of online services allow you to always have income, and sometimes even increase it in comparison to permanent employment. A person no longer needs to hold on to his workplace just to survive since now he can always survive. The new generation is no longer afraid of losing their jobs, this is a different way of thinking and a completely different way of working with the information flow.
— What else influences the formation of this thinking?
— The availability of information also destroys the traditional approach to education. You don't have to spend many years to get knowledge; any information is at a distance of a smartphone and an arm's length. The learning process is also accelerated. And how was it before? We need a new profession, so we are developing a methodology for five years, then we’re introducing it for ten years, and teaching it to everyone for another five years. And now, we have the "big data specialist" profession, it is no more than ten years old, and there are already millions of people working there. And some have more than five years of work experience. Because in a year you can learn, in two more you can gain experience, and in five you can become a cool specialist. Changing the approach to education speeds up the process of changing and finding a job.
— In search of a beloved job, people often turn to the same professions: blogger, journalist, musician, consultant... Is it possible that in a few years the market will be overflowing with freelance specialists that nobody needs? Let's say there will be 20 million copywriters and it’s unclear what to do with them...
— This is the usual balance of supply and demand. If the market doesn’t need so many copywriters, they will have to get a new profession. We have already said that the speed of changing jobs is growing: people get interested faster, get a new job faster, learn faster, see a new horizon faster and learn something again... At the same time, the intellectual baggage remains and grows, since people acquire knowledge from non-adjacent industries. For example, today a person tries themselves in construction, tomorrow in fintech, the day after tomorrow in artificial intelligence; and then it turns out that at the junction of these three areas of knowledge, a specialist was born with a unique vision, which allows him to be almost one of a kind, as well as, very expensive personnel on the labour market.
— How can a person stay afloat, taking into account the YOLO-economy and all its consequences: crazy competition, switching to freelance, and so on?
— It's pretty simple. The first skill is continuous learning. Almost any profession in the modern world can be mastered within a year. This means that before a person can learn, comprehend the knowledge and acquire skills, there is a sea of opportunities. If you know how to study, you will be well-fed, dressed and pleased with yourself. The second skill is self-organization. If you know how to learn and know how to manage yourself then you are certainly awesome.
— You managed to live in the analogue world when there were no personal computers, no Internet, no instant access to knowledge. How do you feel about the YOLO-economy? Is it really an absolute blessing that will save people from their hateful work?
— I like it, but I don’t consider it an absolute blessing. The only thing I want to believe is that freedom as a basic value is important. And I will make products for people who understand this value. Of course, some people aren’t ready to constantly learn and change. Some people want to be in a state of homeostasis. But it’s not the way nature does it, you огіе cannot conserve yourself. In my understanding, society has become more alive and people have become more alive.
— Making predictions is a thankless task, but still, let's dream a bit: how will the YOLO-economy change the world in 10 or, say, 20 years? What will the new world look like?
— The world in 20 years: in this world, people won’t be afraid that they will die of hunger if they don’t work. Human labour is truly the most valuable thing on Earth. People who are free to choose what they do and they want to do — that's mesmerizing. The only thing that can hinder and harm everything is the desire to stop progress. Roll everything back to basic values and "dig out" Maslow's pyramid. Because people who are not afraid behave differently. If people are not afraid of tomorrow, the world is changing: it becomes better, kinder, more diverse.
— So, in 10-20 years a new generation will gain full power and it will have no fear of tomorrow?
— I really hope for that.