When the lines between consumer and business blur

I have (mostly) stayed away from all things Silicon Valley for some time now. After all, I moved across the country two years ago. This relates to a recent post by the New York City-based venture capitalist, Fred Wilson.

Fred was writing about a panel he moderated on how globalization and outsourcing are changing the future of labor. The trends raise interesting and concerning questions about how today’s employees will access economic opportunity in that future.

The broader implications–economic impact of changing ways we make money–trigger a concern on my mind a lot and one I’ve written about before. Small businesses are more like consumers than enterprises. They are the employer and non-employer firms that serve our neighborhoods and communities or maybe offer a unique product or service in a supply chain or marketplace. For many, the business is the owner and the owner is the business.

In any discussion about how globalization and outsourcing affect people, I believe the impact on small businesses should receive equal consideration. Their experience is much more like that of individuals who will be missing steady payroll and benefits.

Continuing with the theme of small business-as-individual vs. little enterprise. Small business access to credit is often based on personal data about the owner, including his or her consumer credit scores. It’s why I hammer on the fact that consumer protections for abusive data collection or erroneous data do not protect the small business owner even when data is sourced from consumer credit.

For now, my point is that we are witnessing a major shift in how we make a living. From counting on employment and perks, mostly gone but still in our dreams, to each of us is our own employer. Whether that leads to gig work or starting a small business, these changes mean we must find better ways to provide basic tools of trust, from identity verification to proof of creditworthiness/ that are transparent and accountable.

In spite of my past as a lawyer, it excites me to think we can leverage technology to achieve the best of outcomes with no incredibly painful (and likely hopeless near term) advocacy for a broader regulatory framework.


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