At the end of the first class Thiel poses a question to test and see if you are indeed moving from 0 to 1. Read the notes (after reading this post first of course) if you want to know what that is exactly.
The academic version is: What important truth do very few people agree with you on?
The business version is: What valuable company is nobody building?
The Gini App was inspired by two simple questions. Do consumers know? What would they do if they knew?
I was in the middle of an $1,800 sales hour during the opening week of the restaurant I currently manage (I will not name it right now due to social media policy concerns). Trust me, that’s a ton of the product we serve. While I was scrambling around the kitchen watching in awe as the line of people stretched outside and around the building in the 100+ degree heat, I wasn’t even thinking about work. I was thinking about the paychecks behind the smiling faces and sweating bodies in the kitchen.
Weeks later, after sales had slowed and the store shifted into the normal swing of things I started doing the math. All of the lowest employees started out at $7.25 an hour. Today is almost six months after the store opening and not one employee has seen a raise. The store sold $112,000 worth of product the first week it was open. Since the first week, the store has leveled off to around $40,000 a week, and sales are starting to ramp back up for the holidays. Over the course of the year the discrepancy between wages paid out and profits collected becomes pretty significant. I don’t know about you, but to me that looks like the local economy is effectively being taxed by corporate America. Remember, that is just one location. Those corporate profits will not be spent at locally owned restaurants, on local produced products, and on local people. That is less money in circulation to hire local employees. Most importantly, I realized the opportunity that outside businesses provide smaller economies is only good if the balance is right. After all, that is a cost that we as consumers should factor in to our purchasing decisions.
In response to Peter Thiel’s question I would say that capitalism is not and does not function correctly for low skilled labor jobs. We need a radical new approach to find a balance between labor and capital.
Wouldn’t it be nice if we could see those numbers and start playing positive sum games rather than zero sum games.
I think it would.
Ehhh…It’s now around 6 am and I have to be back at work at 11am. At least I have Tuesday off! I’ll probably have another post then.