Robert and Kim Kiyosaki speaking

Three Reasons Why Becoming an Entrepreneur is Hard...and One Reason Why It’s Imperative

In the near future, being an employee will be the least secure position in society

When I was a kid, my poor dad often said, “Go to school and get good grades so you can get a safe secure job.” He was programming me for the E (employee) quadrant of the CASHFLOW Quadrant.

My mother often said, “If you want to be rich, you should become a doctor or lawyer. That way you’ll always have a profession to fall back on.” She was programming me for the S (self-employed) quadrant.

My rich dad said, “If you want to be rich, you should mind your own business.” Rich dad recommended I learn to become a business owner and an investor in the B (big business) and I (investor) quadrants.

Today, I would modify my rich dad’s quote to say, “If you want to make a living, you should mind your own business.”

A massive jobs upheaval is coming

You’ve probably heard a lot about artificial intelligence and robots. Just recently the internet made a big fuss over the Boston Dynamics robot that learned how to open a door on its own.

A while back, I wrote a post on how the rise of artificial intelligence and robots will impact jobs. In that post, I wrote:

Today, more than ever, being an employee is the least secure position to be in financially. This is precisely because of the rise of automation and AI. Most employees, however, have no idea that their job could be in jeopardy. Many experts are likening the coming wave of robots to the Industrial Revolution…Most people would rather not focus on these unpleasant facts. And if I were a betting man, I’d wager that most employees, if polled, would say they do not believe that robots could do their jobs. But they’d be wrong. According to an article in Wired, “Oxford University researchers have estimated that 47 percent of U.S. jobs could be automated within the next two decades.

And this week, in the MIT Technology Review, entrepreneur Kai-Fu Lee wrote about the rise of the rapid AI industry in China and how that will impact the world. He writes:

The rise of China as an AI superpower isn’t a big deal just for China. The competition between the US and China has sparked intense advances in AI that will be impossible to stop anywhere. The change will be massive, and not all of it good. Inequality will widen. As my Uber driver in Cambridge has already intuited, AI will displace a large number of jobs, which will cause social discontent. Consider the progress of Google DeepMind’s AlphaGo software, which beat the best human players of the board game Go in early 2016. It was subsequently bested by AlphaGo Zero, introduced in 2017, which learned by playing games against itself and within 40 days was superior to all the earlier versions. Now imagine those improvements transferring to areas like customer service, telemarketing, assembly lines, reception desks, truck driving, and other routine blue-collar and white—collar work. It will soon be obvious that half of our job tasks can be done better at almost no cost by AI and robots. This will be the fastest transition humankind has experienced, and we’re not ready for it.

Lee’s Sinovation Ventures helps found companies in the AI and robotics industry with over $1 billion in investment funds. He knows what he’s talking about. What is more, the article is published by MIT, a university known as a leader in the same field.

Lee is saying what most technology moguls won’t—his industry will wipe out up to half of all jobs.

The question is, what will you do about it?

The entrepreneurial imperative

As I wrote in my post on AI and jobs, I believe the best path forward for today’s employee is to develop entrepreneurial skills. Rather than lose a job to automation and AI, it will be better to either own companies where you can control how those technologies are employed, or even better, own companies that create those technologies and apply them to your field of expertise.

So, for an attorney, that might be starting a company that automates legal research and briefing. For a truck driver, that might mean finding a place to build a company in the self-driving industry. No matter what industry you work in today, the chances are you can find a place where automation and AI could disrupt, and you could build a business around that. Or conversely, try to build a business in an industry where it will be difficult to automate or apply AI as a replacement but where it can help give you a competitive advantage, such as real estate investing.

Real change is hard

If you agree that moving from an employee to an entrepreneur or investor is the best way to survive and thrive in the future, understand that it will be hard to make the change. But it will also be worth it.

A lot of people think they can make a quick jump. The reality is that you cannot move from being an employee (E) or self-employed (S), to big business (B) or investor (I) overnight.

If you are serious, it will take commitment. The following are three-reasons why.

Reason #1: It takes time

It took years for Starbucks to be built. It took years for McDonalds to be built. It was years before Sony became an entertainment giant. In other words, it takes years to build great companies and great business leaders. Most people do not think in terms of years. Most people think in terms of immediate gratification and getting rich quick. That is why there are so few people in the B quadrant. Most people want money, but are unwilling to invest their time.

Reason #2: You have to unlearn to learn again

There is a statement that goes, “You can’t teach an old dog new tricks.” Well, thankfully, we are humans and not dogs. Yet, there is some truth to the idea that the older we get, the harder it is to unlearn things we have spent years learning.

One of the reasons so many people feel more comfortable in the E and S quadrants is because they feel secure there. After all, they spent years learning how to be there. So, many people return there because it is comfortable, even though that comfort is not good for them in the end.

Take your time to both unlearn, as well as learn. For some people, the hardest part of switching from the left side of the Quadrant to the right side of the Quadrant is unlearning the point of view of the E and S quadrants. Once you have unlearned what you have learned, I think the change will go much faster and easier.

Reason #3: This is a transformation, not just a change

All caterpillars make a cocoon before becoming butterflies. Flight school was my cocoon. I entered flight school as a college graduate, and exited flight school as a pilot ready to go to Vietnam. It took me nearly two years to get through basic flight school in Florida. I received my wings, which meant I was a pilot, and I was then transferred to advanced flight training at Camp Pendleton, California.

About eight months into the program at Camp Pendleton, something changed inside of me. During one training flight, I finally became a pilot who was ready to go to war. Up to that point in time, I was flying mentally, emotionally, and physically. Some people call it “flying mechanically.” On that one training mission, I changed spiritually. The mission was so intense and frightening that suddenly, all my doubts and fears were forced out of the way, and my human spirit took over. Flying had become a part of me. I felt at peace and at home inside the aircraft. The aircraft was part of me. I was ready to go to Vietnam.

My process of becoming a businessperson and investor has followed much the same process as becoming a pilot ready to go into battle. It took my failing twice in business before I suddenly found my spirit…a spirit often called the “entrepreneurial spirit.” It is a spirit that keeps me on the B and I side, no matter how tough things get.

Understanding these three reasons on why moving from and employee to an entrepreneur or investor is so hard will equip you to persevere when times get tough. And perseverance will be important in a world increasingly dominated by machines that get neither tired nor give up.

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