26 October 2016

Spare time entrepreneurship

By Dr Rodney Lim

In his book Cognitive Surplus, Clay Shirky argues that following the Second World War, dramatic economic development had created an excess of free time. This accumulation of free time, estimated to be in the order of a trillion hours per year, is what Shirky refers to as cognitive surplus. This resource, however, has always been squandered by the non-productive activity of watching television.

The emergence of social media, according to Shirky, is changing all that. As passive television consumption gives way to active participation online, opportunities for creating civic good have arose. Shirky points to Ushaidi, the crowd-mapping initiative in Kenya that allows people to collaboratively monitor and report ethnic violence, as a product of this confluence of digital technology, free time and creativity. Another example is the colossal Wikipedia endeavour, the outcome of an estimated 100 million hours of cumulative labour, which is a tiny portion of the available cognitive surplus in relation to the roughly 200 billion hours devoted to television consumption in America every year. The implications are quite clear. When people redirect even a small fraction of their spare brain capacities, time and resources to productive undertakings, the results can be transformational.

Apart from benefits to the public, can cognitive surplus empowered by social technology produce benefits on an individual level?

Companies such as Uber and Airbnb are allowing ordinary people to monetize their spare capacities, by helping them to easily connect, through mobile technology, with people who need a ride or a vacation stay. Another startup called Handy allows individuals to earn a side income by cleaning homes for others in their free time. Similarly, Buddytruk allows pickup truck owners to provide moving services for people who need to haul things or move houses. Then there is Urbery which allows individuals to act as personal grocery shoppers for people who are unable or unwilling to visit the grocery store.

Social media is also helping individuals leverage their cognitive surplus for entrepreneurship. In particular, a type of micro-business has flourished, where an individual’s devotion to a hobby, activity or item of interest can generate opportunities for financial gains, with the application of social media. For example, in pursuing a keen interest in photography, one may discover opportunities to earn a side income by extending photography services for weddings and other functions during one’s free time. Similarly, a deep interest in electronic gadgets, fashion, handicrafts or sports can lead one to sell paraphernalia and related products.

All these are possible because digital social media technology helps to surmount barriers to small business creation. Traditionally, entrepreneurship is often something that is difficult, risky and generally prohibitive due to its demands on one’s investment of capital, time and other resources. With social media, however, aspiring small entrepreneurs can utilise free local Facebook pages dedicated to online selling, such as Kuching Kang Tao and Kuching Market, or trade on various online marketplaces such as Lowyat, Mudah or Etsy. Alternatively, cost-free simple web storefronts hosted on free social media templates can replace costly real world storefronts. All these have made small business participation an increasingly ubiquitous activity.

This approach to entrepreneurship gives tremendous flexibility in terms of business entry, exit and growth. Since it does not tie up huge amounts of capital, business entry and exit can occur quite easily. Owners can operate on an informal, flexible, part-time basis, without having to give up full-time employment. Depending on work and other life priorities, the venture can be paused or closed whenever its owner cannot devote time to it, and it can just as easily be resumed at any time. Although there is usually no pressure to fully develop the business, it can still serve as a testing ground and a learning experience with a potential to scale up into a full-fledged enterprise.

For many people, spare time entrepreneurship based on a hobby or personal interest is pursued not entirely for monetary profits but for enjoyment, as it can be intrinsically satisfying. By “playing shopkeeper”, individuals can experience simple business ownership without being exposed to too much risk.

But does this type of part-time entrepreneurship work?

Examples are aplenty of spare time enterprises that have advanced into successful fully-developed businesses. Masala Baby, a children clothing business that started as a side project grew into a national sensation in the US. In Singapore, a second-hand clothes shop on a blog run by three students for pocket money transformed into the country’s largest female fashion retailer called Love, Bonito. Closer to home, two spunky ladies turned a Do-It-Yourself headband hobby into a successful international brand called Sereni and Shentel. And the list goes on.

On the other hand, most of these ventures do not seem to progress beyond their rudimentary forms. Nevertheless, success is probably not best defined by whether they amount to anything substantial, but by the fact that virtually anyone can start a small business in their free time, albeit a trivial or “throwaway” one.

As Shirky mentions in his book, doing something is different than doing nothing.

Dr Rodney Lim is a lecturer with the Faculty of Business and Design at Swinburne University of Technology Sarawak Campus. He is contactable at rlim@swinburne.edu.my