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Showing posts with label Entrepreneurship. Show all posts
Showing posts with label Entrepreneurship. Show all posts

Friday, July 6, 2012

A jobs boom built on sweat in an age of belt-tightening

By CATHERINE RAMPELL | New York Times – Tue, 3 Jul, 2012 1:48 PM EDT

The job of personal trainer is one of the fastest-growing occupations in the United States,despite the challenges of uneven regulation, irregular hours and low pay

Want to know what the job of the future looks like? Go to the gym.

Phillip Hoskins did, but not to work out. He went to find clients, and to join the ranks of personal trainers, one of the fastest-growing American occupations.

“I knew I didn’t want a desk job,” said Mr. Hoskins, of Louisville, Ky., who became a personal trainer after being let go, after 17 years, from a middle-management position at a car repair shop in December. “I’m pretty fit for 51 years old, and I knew I could do something with that.”

Once stereotyped as the domain of bodybuilders and gym devotees, personal training isilikecurves drawing the educated and uneducated; the young and old; men and women; the newly graduated, the recently laid-off and the long retired.

From 2001 to 2011, the number of personal trainers grew by 44 percent, to 231,500, while the overall number of workers fell by 1 percent, according to the Labor Department.

It is no wonder that so many Americans are trying to transform a passion for fitness into a new career.

Personal training requires many of the skills and qualities of the new typical middle-class American job: it is a personal service that cannot be automated or sent offshore, that caters to a wealthier client base and that is increasingly subsidized (in this case, by employers and insurance companies).

But as people with such jobs have found, the pay is low. Unlike the clock-in-and-clock-out middle-class jobs of the past, personal service occupations have erratic hours, require entrepreneurial acumen and offer little job security.

“The kind of job where you come in and work 9 to 5, and where someone tells you what to do all day is becoming scarcer and scarcer,” said Erik Brynjolfsson, an economics professor at M.I.T. and co-author of “Race Against the Machine,” a book about how automation is changing the job market. “The kind of job where you have to hustle and hustle and where you’re not sure whether you will have enough clients next month, where you have less job security, is becoming much more common.”

For personal trainers, the median hourly wage is less than $15. Because they have to find clients and set up their businesses, trainers must be flexible, adapting to client schedules and physical abilities, as well as the availability of exercise machines and accommodating weather.

They must also be able to engage with all sorts of personalities — precisely the skills that help keep these jobs around while others are replaced by algorithms.

biggie01“Knowing how to keep someone motivated and how to keep a connection are skills humans have learned and evolved over hundreds of thousands of years,” Professor Brynjolfsson said. “A robot can’t figure out whether you can do one more push-up, or how to motivate you to actually do it.”

Donna Martin, 69, of Orlando, Fla., recently became a personal trainer after having been retired for 25 years. She mostly works with clients over age 60. “I think my age actually helps me get clients,” she said.

Another reason for the surge in personal trainers — as well as home health aides and other midskill service occupations — is that the barriers to entry are low.

The industry is mostly unregulated, with private organizations rather than governments issuing certifications. Once upon a time, some certification organizations required bachelor’s degrees and intensive study; now dozens of groups offer ever cheaper and easier certifications to serve the fitness boom.

The fitness industry has been growing steadily in good economies and bad, with American health clubs adding about 10 million members since the recession officially began in 2007, according to the International Health, Racquet & Sportsclub Association.

Facing a sea of options, Mr. Hoskins chose an online test that cost $60 by Action, an organization founded in 2008. Action is not accredited by the National Commission for Certifying Agencies, the group the industry uses to vet such certifications, though, and he could not find a local gym that recognized the credential.

He is now studying for a more in-depth test from an older group, the American Council on Exercise, and trying to train clients on his own until he can qualify to work for a gym. The study materials and test cost about $500.

Some older certifying organizations favor more regulation because they see the industry maturing and fear that increasing numbers of new trainers with less experience will dilute the reputation of trainers in general.

“We are really trying to professionalize this industry, and state-by-state licensure may be what we need,” said Mike Clark, the chief executive of the National Academy of Sports Medicine and a licensed physical therapist. “Right now, the gyms really don’t want that, though, because they’re already having trouble finding enough trainers with just the current system.”

In a country with a 35.7 percent obesity rate, potential customers are plentiful, at least in theory.

But personal training, like other personal services, is increasingly freelance. Most trainers drum up their own business. It does not help that trainers must persuade strangers to pay to do something they probably do not like to do: exercise.

“I’ve got a Web site, a blog, a Twitter account, a Facebook feed, an e-mail blast, basically any kind of social media I can find to get the word out there,” said Mark Spurbeck, 28, of Eagan, Minn., a college graduate with a degree in English and history. He got his certification in May but is still primarily working as a Web site designer.

“I’ve been telling my friends: ‘Let’s work out for free. Don’t worry about paying me. My only fee is telling your other friends to hire me,’ ” he said.

So far he has two paying clients, whom he trains at their homes.

Mr. Spurbeck has considered working at a gym, where possible clients would at least all be in one place. But his local gyms, he said, generally take a 50 percent commission on all sessions, and would require him to be there eight hours a day regardless of whether he had clients booked.

That is because many gyms use trainers as recruiters for their own clients, even though knowing how to do the perfect pull-up does not necessarily translate into good salesmanship.

“A lot of people have the passion for the training and helping people, but then they get in that environment and then they just don’t know how to sell themselves to clients,” Mr. Spurbeck said. “I know a lot of trainers who are doing more sales than actually training.”

The incentive structure at gyms has evolved to further prioritize salesmanship over formal credentials.

“Back 10 years ago, pay was based purely on education,” said David Van Daff, the vice president for membership at the National Academy of Sports Medicine, who said he had hired more than 12,000 trainers as a manager at Bally Total Fitness, a national gym chain. “The structure has changed at a lot of gyms, where now it’s based more on productivity — how many hours you’ve already booked.”

As for Mr. Hoskins, he continues trying to find clients while he studies for certification.

“I’ve been talking to people through my church mostly,” he said. “It’s going to have to be word of mouth at this point. All that’s up to me is I have to perform when I do find them.”

 

Tuesday, September 13, 2011

How Venture Capitalists Bring Home the Bacon

Why venture capitalists invest in pigs, not chickens

pigs01 – Jeff Bussgang is a former entrepreneur and partner at Flybridge Capital Partners. This article originally appeared on his blog Seeing Both Sides. The views expressed are his own. –

There is an old parable about the concept of commitment when it comes to breakfast. The story goes that when looking at a plate of the traditional fare of ham and eggs, it’s obvious that the chicken is an interested party, but the pig is truly committed.

When I tell this story to entrepreneurs, my point is usually to contrast the approach venture capitalists have to startups as compared to entrepreneurs. The VC is an interested party, but at the end of the day, if their startups live or die, they typically still have their job, their office and their portfolio of other investments. The entrepreneur, on the other hand, is the pig – truly committed to the outcome, with no fallback.

But lately I’ve been thinking about the parable of the pig and the chicken in the context of the characteristics that make a great entrepreneur – and the kind of entrepreneur that we VCs in general, and my firm Flybridge Capital in particular, like to back. In short, we like to back pigs – entrepreneurs who are truly and completely committed to the outcome of their venture, have a lot of stake, and no fallback.

How do we discern the difference between the two entrepreneurial archetypes? It’s usually relatively easy, but sometimes subtle. Here are a few of the top characteristics we see in entrepreneurs who appear to be exhibiting behavior that suggests they’re more like “chickens” when it comes to their startup:

1) Prefer to wait to start their venture only after they receive funding (“We are ready to go, as soon as you give us your money.” …um, does that mean you won’t start the company if I don’t give you my money?).

2) Don’t quit their day jobs before receiving funding. (“This has been a side project for a year, and I can’t wait to focus on it full-time” … um, if you can’t wait – why are you waiting?)

3) Don’t physically move themselves or their teammates to be in the same geography when starting their venture (think Eduardo Saverin in the Social Network spending his summer in NYC).

4) Prefer to play a hands-off chairman role or look to quickly hire a COO/president in the early days rather than operate as the hands-on CEO/president. (I’ll leave out the numerous examples to protect the innocent, but as a rule of thumb, companies with fewer than 40 employees don’t typically need a COO).

5) Are unwilling to fully leverage their own personal and professional networks to drive recruiting, fundraising and business development.

On the other hand, the top five characteristics we see in “pig” entrepreneurs include:

1) Commit to the new company everything they have – even if that means moving their families, quitting their jobs, or even dropping our of their schools (as much as I don’t want to condone or encourage this).

2) Put themselves “out there” publicly and visibly with the industry, their relationships, family and friends. If the company is a failure, it will not be a quiet one.

3) Have not yet achieved a mega-success already and/or yet achieved wealth beyond the point of needing to work again. (I remember my mentor and boss at Open Market, CEO Gary Eichhorn, congratulating me when I became a first-time homeowner in the mid-1990s and observed: “I hope you got a large mortgage so that you are locked in and highly motivated to create wealth.”).

4) Participate in a minimal set of outside interests and hobbies that aren’t directly related to their business. Starting a company is a consuming, obsessive, 24-7 endeavor. Raising a family and remaining healthy is enough of a battle. When we see entrepreneurs with long lists of hobbies and outside interests, it’s a red flag. One of my partners went so far as to look up the number of times an entrepreneur played golf one summer (which apparently is public information somehow, although I’m not a golfer so still don’t know how he figured this out) as a barometer for how hard they were applying themselves to their new venture.

5) There exists a rare breed of entrepreneurs that have already had mega-success are so special and driven that they remain obviously hungry and scrappy. For these entrepreneurs, the key is to watch and see if they’re still as hands on as they ever were (e.g., obsessed with the product, knee-deep in the financial model, out in front of the organization in selling). Again, these entrepreneurs are very special.

So what are you – the chicken or the pig? Investors clearly prefer one model over the other, not just in the founder, but in the entire team. As a result, as you are assembling your start-up team, be careful not to hire chickens. In the eyes of prospective investors, you may find it’s even less kosher than hiring pigs.