Capital markets are fairly efficient. Every dollar is the same, so dollars can be moved around. You can buy small amounts of stock or larger amounts of stock. You can buy lots of different stocks (and you should!). There is relatively little friction.
Contrast this with labor markets. People are most definitely not the same. Historically, labor has been sold in one type of unit: to one organization, for roughly 40 hours a week, for a long period of time. There are variations (20 hours a week to one organization…self-employment where you have more flexibility over hours…) but the gist is a lot of friction. Finding a job requires effort and it is hard to choose your hours with limited commitment. Starting a business requires its own investment of time during the ramp-up period. Consequently, it is not easy to turn whatever available time you might have into money, whenever you need or want money.
Or at least it wasn’t easy. About 15 years ago, I wrote a few short pieces about the “Craigslist Economy.” Craigslist was (is) one of those gee-whiz concepts from the early internet. A marketplace for everything! Including short term gigs. I interviewed some folks who needed cash, and found things they could do for one weekend (park cars at a party, help someone move, etc.) No long term commitment required. Perhaps these “gigs” were the start of the frictionless labor market!
This phrase didn’t really take off (though you can read my take on the concept in my money book, All the Money in the World). Craigslist is still around, though the gig economy really came into its own when smart phones became popular, and apps like Uber or Door Dash enabled people to truly turn time into money with limited commitment. There’s no need to think up a business and market yourself. There’s no need to set hours. You can monetize your time and the asset of your car when you’d like. If your kids all make it to school successfully in the morning, you can turn on the Uber app and spend the day driving people to the airport. If someone winds up home sick, no problem. You just don’t turn it on. There are big problems with the gig economy, of course, but this flexibility has met a real need.
Anyway, this brings me to the newest iteration of this concept. Lots of people need (or want) to flexibly turn time into money. Door Dash and Uber allow you to monetize the asset of a car in order to turn time into money. But there are plenty of other assets one can monetize. AirBnB lets you monetize your guest room. Fame is an asset. Beyonce doesn’t need to turn bits of time into money, but much fame isn’t like that. You had a TV role a few years ago. You played a season in the NFL. Historically, to monetize that, you could start a related business (e.g. make-up or clothes with a model’s name on it), or write a book, or join the speaking circuit. All of these require a reasonable investment of time before they generate cash.
Which is why Cameo is one of the best business ideas I’ve ever heard of. (Yes, I see it launched in 2017, but I just heard about it…) Cameo allows you to buy “personalized videos from your favorite stars.” For a fee (from $20-$500 or so) you can get a short recorded message from one of these folks. There are a few household names like Magic Johnson, but the sweet spot is, say, a cast member from a recent season of The Bachelor. It makes a great gift for a Bachelor fan in your life. And someone who was on The Bachelor can make a quick $50. How awesome is that?
Anyway, I’m sure there are other assets that someone will figure out how to flexibly monetize, but I thought this one was really cool. And in the meantime, I’ve got a great new gift idea for the young Survivor fan in my household…
We used Cameo in March, 2021, which was the first time I heard of it. My mom turned 80 and her favorite football player is Rocky Bleier from the Pittsburgh Steelers of the 1970s. He did a wonderful, very personal message for her and the turn around time was about 24 hours.
@Cindy- what a great gift! You can tell that some people on the site really get into it, which is wonderful – I am sure it is so rewarding to watch the reveal videos.
Our son’s high school used Cameo to make a commemorative graduation video in May 2020 when there was no in-person graduation. They got a kick out of having a couple of shout outs from celebrities!
@Nancy- I bet! I love that it’s also creating a market whereas in the past people might have been requesting personal favors from various celebrities to do this. When there’s a $ amount attached no one needs to feel bad about anything.
Bullshit Jobs by David Graeber makes the point that only relatively recently in human history has the concept of buying someone else’s time existed outside the context of slavery or indentured servitude. Prior to the Industrial Revolution, the time one spent doing most jobs (other than being a servant of some kind) was governed by how long it took to do them (e.g., any kind of artisan) and/or when it was possible to do them (e.g., farming). Perhaps some of the friction in what has since become the “traditional” 9-5 labor market arises from the disempowerment of 1/3 of one’s time–which is 1/3 of one’s life–being “owned” by someone else.