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The Future of Work – What Is It, Really?

“So, what is ‘future of work’?”

As the Head of the BootstrapLabs Venture Studio for Future of Work (phew, that’s a long title), I’ve been getting that question a lot lately. The term “future of work” is broad and covers a wide range of areas. To understand where work is heading, you have to ask yourself questions like: “What are the big trends that impact how we work?”, “What do we want from work?” and even “What is work, really?”.

Big and broad questions. Maybe there is another way to approach it? A reasonable starting point is to at least agree on a fundamental definition of work itself. I like this one:

Activity involving mental or physical effort done in order to achieve a purpose or result.

Things get messier when we start talking about organized work and we have multiple people coming together to achieve a shared goal. We use constructs like companies to set the legal and mental frameworks for collaborating. In the book “The Next Rules of Work“, Gary A. Bolles writes:

The purpose of the organization is as a platform for channeling human energy.

We live in a free market system where those companies that can best achieve desirable results for their stakeholders (primarily customers and owners but also employees, partners, society, and the ecosystem) survive in an ever evolving game of competition. We can put the two sentences above together and form a sort of optimization target for companies:

The organisation that can best channel human energy to focus mental or physical effort to achieve results for its stakeholders will win.

Notice how words like “salary”, “employment” or “office” is absent from this sentence. And what does a silly little statement like this tell us about the future of work? Isn’t it obvious that the best organizations win?

The reason I would like to take a step back, and ask basic questions like the ones above, is because we are in the middle of a paradigm shift and when those happen it’s a good idea to look at the bigger picture. While inside a particular paradigm, improvements and changes are incremental, but when moving from one paradigm to the next a lot of what we believed were fundamental truths turn out to be just side effects of the current paradigm.

The office is a perfect example of this.

Before the pandemic, not having an office seemed like a crazy idea. Today, many companies are asking why they pay overpriced rents for central locations that no one visits. It turns out that the office was a relic from the days before video meetings and internet based work. It was a paradigm specific “false” truth that you have to have an office. (I do think that physical meeting spaces have great value for people, but it is at least very different from what it used to be. How is it different? Well, to answer that you have to understand why we meet to begin with, so you have to understand the fundamental truths.)

There are many false truths like that and if you want to understand the Future of Work, you have to ask yourself what are the paradigm specific false truths and what are the fundamental truths?

I plan to post a series of blog posts digging in to this question, because it where the fundamental truths meet the new opportunities provided by a new paradigm that a huge potential for value creation in the form of new startups opens up, so make sure to stick around.

And of course, feel free to connect if you want to continue the conversation about Future of Work!

Erik Starck

Please note this is a short version of the Venture Capital Disrupts Itself: Breaking the Concentration Curse report published by the Cambridge Associates. At the end of this blog post you can find the link to access to the original file.

Venture Capital Disrupts Itself: Breaking the Concentration Curse

The Old Wives Tale … Conventional investor wisdom holds that a concentrated number of certain venture firms invest in a concentrated number of companies that then account for a majority of venture capital value creation in any given year. Therefore, LPs seeking compelling venture capital returns should only commit to a handful of franchise managers. And those are precisely the managers that do not offer access. Thus, LPs are “cursed” and will never experience the differentiated return pattern offered by venture capital exposure.

… Is Flawed. As the venture capital industry and technology markets have evolved and matured, however, more managers are creating significant investment value for LPs, with value increasingly created through companies located outside the United States and across a range of subsectors. Specifically, our analysis of the top 100 venture investments as measured by value creation (i.e., total gains) per year from 1995 through 2012, an 18-year period, demonstrated:

an average of 83 companies each year account for value creation in the top 100 investments in the asset class for each year;
in the post-1999 (i.e., post-bubble) period, the majority of the value creation in the top 100 each year has, on average, been generated by deals outside the top 10 deals;
an average of 61 firms account for value creation in the top 100 investments in venture capital per year; and
the composition of the firms participating in this level of value creation has changed, with new and emerging firms consistently accounting for 40%–70% of the value creation in the top 100 over the past 10 years.

In short, the widely held belief that 90% of venture industry performance is generated by just the top 10 firms (which our analysis shows was somewhat relevant pre-2000) is a catchy but unsupported claim that may lead investors to miss attractive opportunities with managers that can provide exposure to substantial value creation.

You can access the full Cambridge Associates report here.

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The Future of Work – What Is It, Really?