The Future of Work: Exploring Entrepreneurship and The Freelance Revolution

Welcome to a Special Edition of the Inner Radio Newsletter!

On a weekly basis someone reaches out to me saying I'm thinking about starting a coaching practice or going on my own in some way. There’s a realization that working for a big organization isn’t as stable or secure as we once thought.

Rex Woodbury has spent lots of time working with entrepreneurs doing things their own way, previously as a Partner of Index Ventures, and now as Founder and Managing Partner of Daybreak, an early-stage venture capital firm based in New York City. He has a pulse on what’s next at the cross-section of people and technology. I had to share our conversation about the future of work – what it means to start your own company, how to decide whether to work for someone else’s, and what happens when America becomes a freelance-majority workforce (you read that right).

Jennifer Ouyang Altman: "Rex, we've talked about how startups are all about people. What qualities make someone the right person to lead a startup?

Rex Woodbury: You really need to have the entrepreneurial spirit in your DNA–the drive and hunger and ambition. Some founders I work with joke (darkly) that their drive comes from childhood trauma. I know that my own motivations often stem from my upbringing and parents–this is true for all of us. I remember once going to a founder event, and the founders were thinking about the things that motivate us. One founder joked that she should probably go to therapy, but that she doesn’t want to go until after IPO–she’s worried she’ll lose some of the fire within her, the chip on her shoulder. That’s the extreme of course. I’m a believer you can go to therapy and not lose your intrinsic motivators–you can just understand them better. But I know that her sentiment is indicative of something the best founders have: this inexplicable, unstoppable internal drive. For the best founders, this drive comes from a place of being a missionary, rather than being a mercenary. They believe that the world will be a better place with their product, and they’re going to will their company into existence. 

Jennifer: You alluded to your own upbringing. How has that influenced your motivation?

Rex: My mom passed away when I was one, so I grew up raised by my dad. My dad is someone who encouraged my brother and me to be dreamers–he told us we could do anything, and I really believed that. I feel very lucky to have had that kind of encouragement. But it also, I think, instilled in my mind at a young age that I needed to be special and change the world–a lot of Millennials can probably relate. This is the participation trophy generation. I also grew up closeted, and that led me to seek validation and acceptance externally. Learning to find motivation more intrinsically has been an ongoing journey for me. 

I think a trap that a lot of people fall into is building the career they think other people expect from them. Perversely, this actually ends up gating success and making people revert to the mean. Being exceptional means taking risks and charting your own path. It took me a long time to learn that. 

Jennifer: On the road of taking risks and charting your own path, how can people figure out where they belong in the startup world?

Rex: Being a founder isn’t for everyone–it takes a certain type of person. And not every founder was a great employee. I work with some founders that were sort of…well, terrible employees at the companies they used to work at. They were smart, but maybe not meant to work in a large organization or to work for someone else. People should figure out how they like to work. Do you like working for yourself? Do you like solo work time, or a social job? One interview question I was asked when I was 22 was: would you rather spend all day doing work alone in front of a computer, or all day back-to-back in meetings? Of course, the answer for most of us is a little bit of both. But those questions help suss out when you’re in flow, what you enjoy doing, and so on. These are important for startups too. A lot of people might like the grind of Seed, finding product-market fit. Others like the turbo-growth of Series A and B. Other people make good hires when companies are larger and there’s a bit more structure. Some people scale with their organization, and others don’t. That’s totally fine. Founders should just realize that some early employees were instrumental in getting from, say, $0 to $10M of revenue, or from zero to 50 people, but their skill-set might not be aligned for the next phase of growth. That’s not a bad thing. It’s a service to the employee and to the company to recognize that. 

Jennifer: It’s tough to recognize when people we’ve built relationships with and care about have outgrown their role or their role has outgrown them. What kind of support can founders lean on in these moments?

Rex: A lot of founders don’t want to talk to their venture investor as a therapist or coach, because they think they should come across as infallible. Being vulnerable may go against how they “should” act, in their heads. I always want to give founders space to be open about struggles. It’s normal to express frustrations and doubts; building a startup is very, very hard. The best investors can help founders navigate those moments. I encourage founders to get a coach or a therapist (or both)--having someone to talk to, beyond driving your spouse or family crazy, can be a helpful outlet. It’s a worthwhile investment. 

Jennifer: That great advice, any words of wisdom for startup employees?

Employees should join a startup where they believe deeply in the mission and enjoy the day-to-day work–not just the startup where they see a good financial arbitrage opportunity. It’s much more difficult to work for a company where you don’t believe in the mission, and things don’t work, than a company where you love the people, you love the product, and you love the vision. Even if it doesn’t work out, you’re proud to have worked on it. 

The other question I’d ask: is it a place where you’re learning? Even if you join a company and commit two, three years of your life, and the business winds down or isn’t a big outcome–if you were challenged and really stretched and learned new skill sets, it was likely a worthwhile use of those two or three years. Follow smart people. You’ll work with people who push you and up-level you, and then you’ll have a network of top 1% people. 

Jennifer: Being passionate about a mission is great. Working with smart people is great. AND I keep reading about how employees are super unhappy. Do you see that in the startup world too?

Rex: Very much. The public market tech stocks have seen a 70 to 80 percent correction. Privates aren't down yet because a lot of companies have runway and we’re waiting to hear the news of down rounds and flat rounds. Those down and flat rounds are coming and a lot of internal valuations will get cut by 70 or 80 percent.

I think it is a huge morale shock to the organization when you realize that those numbers were inflated. People say, my gosh, I was kind of relying on this financially or making decisions based on this valuation.  Why was I working so hard if I’m not compensated adequately? So, I do think a lot of people are exhausted right now, and part of the result will be that some people decide to leave the startup world. Others might say, you know, instead of me joining a startup early, maybe I'll found something of my own, right? The risk is pretty similar between joining really early and starting a company. But the reward is 50x or 100x different. And so, I think a lot of people are going to do that calculus and that's why 2024, 2025, 2026 will be huge vintages for startup creation.

Jennifer: On a weekly basis someone reaches out to me saying I'm thinking about starting a coaching practice or going on my own in some way. There’s a realization that working for a big org isn’t as stable or secure as we once thought.

Rex: You’re getting to I think one of the biggest shifts in work, which is the shift to self-employment and the shift to freelancing. America will become a freelance-majority workforce in 2027. I call it the disaggregation of work. A lot of professionals would prefer to do project-based work on their terms. A lot of people want to work for themselves. They want more flexibility.  A big investment theme for me at Daybreak is what I call digital native job platform. What are the companies that allow new forms of work that are more autonomous? These new jobs are often internet-native. One of my companies, for example, is a company called Flagship that allows anyone with an online following to launch their own boutique store front and curate their favorite products. Then you or I shop from their store, the creator-retailer gets a cut of sales. Flagship underpins a new class of small businesses. With emerging startups, there are so many new jobs that are flexible, that are self-directed and motivated. If we look at trust in the US, trust in institutions has degraded enormously and trust in people has gone up enormously.I think people are going to say, I want to bet on myself, I want to work when I work, how I work. 

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Jennifer Ouyang Altman is the CEO and Founder of Inner Radio, a leadership coaching company working with executives hungry to define their leadership style, build effective interpersonal relationships, and harness the power of team. She facilitates communication and leadership courses with Stanford’s Graduate School of Business and is a CEO coach for Berkeley Haas’ CEO program. Her work has been published in the Los Angeles Times and Washington Post. She believes in the rules of radio: clarity, simplicity, and personality. You can’t speak and listen at the same time.