Why Entrepreneurship Is The Safest Career Move You Can Make

Shannon Waller: Hi, Shannon Waller here, and welcome to Inside Strategic Coach with Dan Sullivan. Dan, I have been over the moon excited about our latest quarterly book, which is called Creating Great Leadership. And one of the things you talk about is actually going back to a book that you wrote a long time ago. I'm having trouble remembering how many years, called The Great Crossover. But one of the things that you identified back then, and again more recently, is how organizations have changed over the last 50 years. And given that we're now in 2025, it seems very timely and appropriate. And also we'll get into in this, I think, and also future podcasts, how we need to operate differently in these newer, differently structured organizations. So how have companies changed? How have organizational structures changed over the last 50 years and why?
 
Dan Sullivan: Well, first of all, 50 years ago was 1975, okay? And I started noticing in 1973 that a word was being used. I'm a big news junkie and I would read a lot of you know, articles, commentary, you know, of people who were just noticing what was changing and a word was being used. And I was really intrigued by the word and the word was microchip. I've done searches in this, and the microchip was sort of a back stage name that the tech community was using to describe what was happening with what were called integrated circuits, and that electronically they were noticing that they could put information into a device, and they noticed that Gordon Moore, very famous technology pioneer, created Intel, and in 1965, he had created an article that said, this new device that we're creating, it didn't have the name at that time, Microchip.
 
I'm noticing with three data points that when we started it, there was a data point. And then two years later, we noticed that the amount of information that we could put into this device had doubled. And the cost of the computing to do it had gone in half. So it was basically two times two, and there was like a four times increase in productivity. And then two years later, he noticed that it had happened again, and he wrote an article. wasn't an earth-shaking article, he just noticed, he said, I just wonder how long this can go. As it turned out, his article got passed around and they said, oh, this is a really good measuring of our progress in the technology world that we can just plan every two years we'll work to make the technology twice as fast and half the price. And it's called Moore's Law and it's been going nonstop since whenever he wrote the article. It varies, it's 19 months, it's 23 months. And then they got it to the point where it was actually a thing.
 
And they were noticing that they could pack more and more information into this little piece of silicon and that created Silicon Valley. And so that was just happening. This was just happening around ‘73, ‘74. And it actually gave me my confidence to become a coach. I'd been a copywriter in that agency, and I started reading articles. There was a good series in the New York Times, science writer, technology writer, one of them. And he said, this new invention is earth-shaking, and it's going to shake how we organize ourselves in our companies, in our organizations. And he said really large organizations, which are like pyramids, and you have a few people at the top who are CEOs, and they're the C-suite, and they're leadership people, and then below them you have level after level after level after level of management. I did some research in General Motors, which in right about the time that Gordon Moore was making his predictions, 1966, they had 18 levels of management from the CEO down to the factory floor, which meant the message had to go down 18 levels. The change in the factory would require 18 levels of information going up and down. And he said that this chip can transfer the information instantaneously, where that other process might process it accurately.
 
So the message stayed the same. And then he just made a whole series of predictions that large organizations, big government, big corporations, big unions, big everything, which was pyramidical, was going to have a hard time dealing with this little chip. And it was going to actually favor smaller organizations and even individuals who could learn how to utilize the devices that would be powered by this, which turned out to be personal computers. There were no personal computers in 1973-74 that individuals and small groups could have the information processing power of more than large organizations. Much faster, much more useful information. And so there would be essentially a very disruptive impact on the large organizations, but at the same time, there would be all sorts of new organizationals at the smaller level, down to 5 to 10 people, could have the information processing power that maybe GM had, in terms of effective, useful information to make decisions, take actions, and produce results.
 
At that time, I knew my future was coaching. I could have made a good living spending my life as a copywriter. I was good enough to do it. I can't say I was a great copywriter, but I was good enough not to get fired and would never have gotten fired. But I really had this idea that there was a new possibility for coaching people, and especially people in small organizations, five to 10 people, and they happen to be entrepreneurs. So, you know, my desire to coach got married to entrepreneurism right at the time when an invention came along that would allow entrepreneurs to have lots of power. They would have lots of capability that they had never had before. And at the same time, large organization would start fragmenting and they wouldn't be as effective, they wouldn't be as useful. So that's the background to it.
 
Shannon Waller: It's so true. I remember when I came into the workforce, which was in the 80s, there was still … and you actually had GM as a …
 
Dan Sullivan: Yeah, and it was slow moving.
 
Shannon Waller: Oh my gosh, and political, and you had to know the purchasing officer who had a lot of status. Everything had to get done before your purchase, like you had to have it all pretty much sorted before you would get the signed purchase order. It's a very different process. Very relationship based as well. Yeah, so the company I worked for, the main client was General Motors of Canada, which is the largest organization next to the Canadian government. Huge, huge. Still an offshoot of the U.S. one, but that was the structure. So that was my first role. So big companies were still a thing. And that disintegration, which I remember the illustration you wrote about in The Great Crossover, which is really fun. This, you know, little circles and breaks happening in the pyramid. And then things have really shifted to actually be more microchip-like, if you think about it that way. So talk about, Dan, what has happened post-pyramidical structures and hierarchies.
 
Dan Sullivan: Yeah, where I entered the scene, as far as the diagram goes, I started coaching then. So, ‘73 is when I got clearer based on the predictions that were being made by the New York Times writer and other people. So, in ‘74, I resigned from my job and I started coaching. I experimented with different kinds of clients, but very quickly I hit upon the entrepreneurs. Because entrepreneurs, if you showed them a good idea, they could make a decision to have you as a coach in the moment, and they could write a check in the moment. Whereas if you're dealing with a large organization, you might get a decision three months later, and three months later you would actually get your first check. And I was an entrepreneur, and my nervous system couldn't tolerate that, nor could my bank account.
 
So anyway, I started coaching that way, but still there was no personal computers. The ice jam was starting to melt. But when basically the year, I think, ‘78 or ‘79, and it was, I think it was IBM. IBM came out with the first personal computer, which was still slow until an inventor at Xerox, because you needed to know how to program and they didn't have much storage. They didn't have much memory. They didn't have usable memory. They just didn't have enough memory to be really useful. And then someone created, a researcher at Xerox, I think, Park Palo Alto Research Center for Xerox. He created the graphic user interface, which Steve Jobs at Apple picked up, and then Bill Gates at Microsoft picked up. And then all of a sudden, these personal computers were there. And then you still had to store floppy disks, you know, for a long time. And then basically, you started getting memory chips. And you had sort of what I'd call achiever chips and backup chips, you know, in the same computer.
 
But Moore's law, the doubling every two years was continuing. Gordon Moore, when interviewed about his law, he said, well, it's not actually a law, it's just a way of measuring forward aspirations. He says that, okay, we've got a chip now, it's more powerful than it was two years ago, now the goal is to do the next two years and double the speed, double the amount of information, and then the price gets cut in half. It's a wonderful multiplier in the economy. And it did everything that the prognosticators, the predictors, New York Times, and hundreds of other places were saying. Something very big is happening.
 
But what has happened, and there's actual really good data to support this, is you just measure incorporated companies in the U.S. economy. About every 15 years, the number of employees you need in an organization is about half of what it was 15 years previously. So probably in 2005, it's everybody who is incorporated as a company. That's public companies, small companies. There's passive companies, which they exist for tax purposes. They don't actually have anybody, but active companies. Right now, there's about 33 million. I looked at 2023, there's 23 million. And then they divide the number, total number of employees that the tax department says are receiving tax receipts. So in 2005, it was 24. Now it's 12. A couple of years ago, it was 12. And probably as we go forward another 10, 15 years, it'll be 6. So 24 people.
 
Shannon Waller: In the past, and now it's 12.
 
Dan Sullivan: Well, yeah, it's half.
 
Shannon Waller: Average number of people. That's amazing.
 
Dan Sullivan: And the number of companies has increased in the same way. Because it's very easy to incorporate. I mean, actually, Canada is one of the, especially Ontario, is one of the easier places in the world to incorporate. Now, I remember this is a long time ago, but all you did was go to the Ontario Government Services and, you know, you fill out a form, you put it in, and you pay a certain amount of money, not very much. Then you have to go to a bank and get a stamp. You actually have to get an incorporation stamp and stamp your paper, take it to the bank, and open a bank account. And you could do that in the same day, you know. There's countries in the world where it's six months plus a lot of bribes to do it. So the speed of incorporation is really an important point of how many companies you're going to have. But my sense is that it used to be longer in the old days. Okay, when you had the big corporations, but now that little companies with microchip power can be powerful economic forces. Government has adjusted to make the process faster and easier.
 
Shannon Waller: That's amazing.
 
Dan Sullivan: A great example of the understanding because of microtechnology that you can get way more done with not as many people is when Elon Musk bought Twitter. And I'm profoundly ignorant about this, because I've never been on social media. I'm on social media, but I personally have never been on social media. I mean, I'm broadcasting every day, but actually live personal experience of Dan actually signing on social media, either receiving or sending, is not happening. He's just never had that experience. And it's done me wonders not doing that. It saved me enormous amounts of time. But the thing about this was I wrote a book in 1995 when I was observing what had happened in the first 10 years. And I said, it seems to me that we're in a great crossover. And the name of the book was The Great Crossover. And it's out of print now. I think you can probably get copies on eBay. Somebody will make a lot of money that I'm not making, but that's okay.
 
But in ‘95, I said, I think we're going to be in a 50-year period. So we still had another 30 years to go. Yeah, ‘75, ‘95. So it was 20 years when I wrote this. We're going to go from this large pyramid shape to networks. It's going to be all networks. The management is all going to be provided by the power of the microchip technology plus the enormous software that's been created along with that, which now includes just recently, artificial intelligence agents, which do a lot of management work and information processing work and problem-solving work that used to require many, many people, and that's really not required. But it also opens for a lot more people to have ownership of companies and to have leadership positions in their smaller companies. And right now, we and Coach are pushing to have it that everybody in an entrepreneurial organization is actually a leader. They have a Unique Ability and a unique role.
 
Anyway, I think the predictions that I made in ‘95 about what was happening from ‘75 to ‘25 had largely come true. Talk about Elon Musk when he bought Twitter, now X. First thing he did is he fired 80% of the people who were there, and he found out that there was no evidence that not having those 80 … Now, he's a genius at technology, so I'm sure he introduced all sorts of labor because he had really built large corporations economically that weren't big corporations. Although, you know, Tesla's got a large number of people, but that includes his SpaceX, it includes Starlink, it includes all sorts of other things that he's spun up and everything else. But his whole thing is, you should be able, as you go along, with the same number of people to get a bigger result. And in some cases with fewer people, a much bigger result. So I think it's largely proved out. And this is entrepreneur land, my feeling is. The future for large pyramid bureaucrats, which used to be the safest jobs in the economy, are now the riskiest jobs in the economy. Whereas being an entrepreneur and being able to create your own future and respond very quickly to market opportunities is actually the safest, not a job, role.
 
Shannon Waller: But this came out of our most recent book, which is called Creating Great Leadership, is that where before it was pyramidical, now, if you think about a microchip and how it works and what it looks like, that's kind of what organizations look like. So entrepreneurial organizations are great at networking with other companies, but also inside of it, it's actually also an information network. So each person, or each team, if you wanna look at it that way, is a node, right? So how does it become more capable and more functional? What are the connections between them? It's a very different way of operating. And as someone who is really passionate about entrepreneurial teamwork and how it works, your perspective, your context around this is a big deal.
 
Dan Sullivan: Yeah, I think so. And so probably why we make a lot of money in Strategic Coach is, first of all, we have restrictions on who can be in Strategic Coach. You have to have years of experience as an entrepreneur. You have to be a proven, successful, proven, talented, proven, ambitious entrepreneur. But what happens is that entrepreneurs who are taking advantage of this new technological world are still operating from a mindset standpoint as if they're creating a pyramid corporation. So if they scale, they're resembling the way that the old pyramids got formed. And they started creating little bureaucracies inside of a technological environment. And they hit the roof. They hit the roof. They don't grow anymore.
 
And they're so frustrated. The entrepreneur is not able to do what they would really like to do. And they've got all sorts of management complexities. And I said, you're trying to repeat the pyramid culture, the bureaucratic culture, inside of a you know, you've got unlimited entrepreneurial opportunities in this new technological world that you're operating from. So I would say The Strategic Coach just gets you to transition your mindset as an entrepreneur from being a corporate bureaucrat to being an actual entrepreneurial innovator to take advantage of all the technology that's now operating in what is essentially a microchip enabled economy. So I'm just seeing this as I'm saying it, but I think that's all that Strategic Coach’s, all our tools and our thinking tools, are just getting you to not be a bureaucrat.
 
Shannon Waller: I love that. And let me add in there, Dan, that, because I work with leadership a lot, is people you're hiring are coming in expecting that kind of structure. What's the growth structure? And what's the pyramid look like? And how can I, you know, go to the top? And entrepreneurial organizations tend to be so much flatter. Your value creation is based on, this is what I'd like to touch on next briefly, because we could talk for days about this, is about expanding your own Unique Ability and the positive impact of that. Because that's really, if you think about it, how a network works, each node is incredibly capable and fabulous. And it's the expanding impact and value of that that actually leads to all the status you've ever wanted. So how does Unique Ability fit into this new network model?
 
Dan Sullivan: Well, that's the starting point that each individual, we don't call them employees inside Strategic Coach, they're team members. What we put a lot of emphasis on is that to get into the company, we have a present need and that can be described as a job. So there's a job description. So in a certain sense, you're coming into a job, but what we're going to do as soon as you can, we're going to start finding out what's really unique about you. And we're going to take you from having a job to having a role. Okay. And then all the growth of people in Strategic Coach are those who started with a job, very fixed, you know, you have to do this and this and this, and, you know, you have to be part of a team where everybody else is doing this and this and this, and there's a front stage in theater terms, there's a front stage presentation.
 
But as you get more and more clear about what your Unique Ability is, your unique role, then you can grow according to how you want to grow inside the structure of the company. Without knowing it, I think we've arranged Strategic Coach to be a pure network company, not a little bureaucracy, but not so small anymore. We have 120 in that neighborhood people, so it's considered a medium-sized. It's not a small business. It's a medium-sized business. If we just stuck with our current management structures, there wouldn't be any growth. There wouldn't be any growth that you felt excited about. There'd be growth, but it wouldn't be creatively exciting.
 
Shannon Waller: Which is so, for me, at least, and I know for my colleagues, is so critical, right? To be creatively excited, knowing that the future allows you to create new things, to address, you know, our clientele's issues and challenges and create solutions for those. I mean, that's what's so great about entrepreneurial company is you can create new stuff and go test it on the marketplace. And if that gets shut off or shut down or, you know, you talked about this 18 levels of GM, you can just imagine what the message looked like by the time I got to the shop floor. It would have been like broken telephone.
 
Dan Sullivan: Yeah, and even GM and all the large, just to use the automobile industry, there's enormous stuff that GM does today where the design of their cars used to all come from inside. Now, there are entrepreneurial design shops that produce new designs. And you take every function that used to be inside GM, it's now probably outsourced. Basically, the main function of large automobile companies is as finance corporations. That's where the money is really made is on the financing, because very few people pay full price for a car. So every car is like a loan. And that's where they make their money, and they make their money on servicing and everything like that. So probably GM from 60 years has no resemblance to what GM looked like before. And they're using technology, but it has no resemblance to the kind of life and culture that used to exist in GM.
 
Shannon Waller: I would agree.
 
Dan Sullivan: And it's come with great resistance, you know, these big corporations, big organizations, big government things, they're designed to resist change, but it doesn't matter because this new world is reality and they have to adjust themselves to reality or go bankrupt.
 
Shannon Waller: The other role that I see larger corporations taking is finding the innovative entrepreneurial companies, often buying them or funding them, because one of the things that big companies can do is help scale. So they don't have their own original ideas.
 
Dan Sullivan: No, I would say large corporations are far less inventive. 100%.
 
Shannon Waller: And whereas it used to be, from history I've read, think about 3M, for example, you know, they created new stuff, even Kodak a million years ago. But now those innovations don't come from within the company. As you said, they get purchased and bought, and then they can bring it to a wider. So they kind of have the reach in, if we think about the Dean Jackson's VCR formula—vision, capability, reach—they buy the capability and get it out to people. So Dan, let's just take this into a practical application. I love describing Coach as something that keeps people from becoming little bureaucrats in their company. So that's, I would agree with that. So what is an action that people can take to become more confident about being a networked company both internally and externally? Is it focusing on Unique Ability? Is it a particular awareness about tech? What would your coaching be to someone who's like, okay, I'm ready to embrace this mindset, what can I do?
 
Dan Sullivan: Yeah, well, there would be two steps. One is that if you're not an entrepreneur, or you're an entrepreneur and you're not making $200,000 a year, then you can buy our new book, which comes out in March. And it's called Growing Great Leadership, and it's a very short book, it's 60 pages, and it's got an audio track, it's got a video track, but it also has something else. It's got a tool which will allow you, the moment you do the tool, to start actually creating the reality of this being a highly creative, productive, and profitable person in the microchip network economy. And if you do qualify, then give us a call and enter into our entrepreneurial community.
 
Shannon Waller: I love those action steps Dan and I'm also hoping in a future podcast that we'll talk a little bit about how to become self-leading. Because that is a key aspect, but we'll leave that for the next podcast.
 
Dan Sullivan: Yeah. I mean, you're either interested or you're not interested. There's a lot of people who, until they hear this podcast, they didn't have the big picture to actually measure where their excitement is as an individual, just as an individual, not talking about an organization, just as an individual. They can compare it with their work experience and say, you know, the way that things are organized around you, I mean, does it either encourage or hinder you being really creative in a unique way that you know you can be creative or not? And I think the book would be very good just to give people an intellectual understanding of where they are. And then we do provide the tool, and the tool will work. I mean, regardless of where you are, the tool will work. But you're either interested in that or you're not interested in this, and we're only writing and talking to people who are interested.
 
Shannon Waller: Great. Dan, thank you. I mean, having been around since The Great Crossover came out and a part of that economy too, I really appreciate your perspective and context and then direction about how to be really successful because a lot of us grew up with, inherited, and know how to be successful in pyramidical companies, or at least that's what we're familiar with, but actually there's a new way of operating, a new mindset, new habits, which we'll get into, which is also outlined in the book, which is exciting, to help be even more successful, outrageously, creatively successful in this new networked economy.
 
Dan Sullivan: Yeah, 33 years ago, it was one of my greatest achievements. I picked you up with a diagram.
 
Shannon Waller: You sure did. I love it. Yeah, it was actually you talking about the shift from the industrial into the knowledge economy and how the world was shifting. And the person who I talked to asked me two questions. She said, did you like what you heard? Because I'd seen you present. I said, yeah, I loved it. Dan put together and integrated things I had heard about, but had never integrated that way. And then she asked me, are you happy with what you're doing? And the answer was no. So I stopped working with the company that worked with General Motors of Canada and joined Strategic Coach. So thank you for that, Dan.
 
Dan Sullivan: It's been a good partnership.
 
Shannon Waller: And a great partnership. Thanks so much, Dan.
 
Dan Sullivan: Thank you, Shannon.