Hoodies, Disintermediation, and the 457 Visa Program

American Giant Hoodie

American Giant Hoodie

An article titled “This Is the Greatest Hoodie Ever Made” article appeared a few months ago on Slate.  It’s an interesting article, but what grabbed me most about it is that it’s yet another example of technology disrupting traditional business models.  (The author raved so much about the hoodies by American Giant, that the post went viral and caused fulfillment issues for the business).

The author stated that the key to making the greatest hoodie ever is disintermediation:

Today, when you buy a hooded sweatshirt, most of your money is going to the retailer, the brand, and the various buyers that shuttle the garment between the two. [Not to mention the retail].  The item itself costs very little to make—a $50 hoodie at the Gap likely costs about $6 or $7 to produce at an Asian manufacturing facility. 

American Giant has found a loophole in the process. The loophole allows Winthrop to spend a lot more time and money producing his clothes than his competitors do. Among other things, he was able to hire a former industrial designer from Apple to rethink every aspect of the sweatshirt, from the way the fabric is woven to the color of the drawstrings around your neck. The particular loophole that Winthrop has found also explains why he wanted to chat with a technology reporter: It’s called the Internet.

We’ve seen this kind of disruption in manufacturing, real estate, travel, retailing (especially in some categories, such as books), and now even education… basically anything with an intermediary is ripe for disruption (if you have “Agent” in your job title, be very very scared).  And it’s not just consumer markets that are affected – it’s the talent market as well.  Here in Australia there’s a lot of controversy over the skilled visa (“457 visa”) program.  I wonder how long the debate will be relevant in a world where traditional barriers to accessing knowledge and skills are rapidly falling away?   The challenge for both employers and governments is to adapt to this changing economy and way of working and get the best talent with the least number of artificial barriers.

Bob does his own workforce planning by outsourcing his job to China

Hitting the news last week was a story about an employee who outsourced his own job to China, at 20% of his wage, so that he could watch cat videos all day while getting paid.

Bob and Bob - Productivity Consultants from the movie

Bob and Bob – Productivity Consultants from the movie “Office Space”

According to The Next Web, “Bob” was paid several hundred thousand dollars a year across multiple employers, and outsourced the lot to China for $50,000 a year.  His typical work-day was something like this:

  • 9:00 a.m. – Arrive and surf Reddit for a couple of hours. Watch cat videos.
  • 11:30 a.m. – Take lunch.
  • 1:00 p.m. – Ebay time.
  • 2:00 – ish p.m Facebook updates – LinkedIn.
  • 4:30 p.m. – End of day update e-mail to management.
  • 5:00 p.m. – Go home.

Verizon, the company who ultimately discovered what was happening (not the employer) said on their blog: “Investigators had the opportunity to read through his performance reviews while working alongside HR. For the last several years in a row he received excellent remarks. His code was clean, well written, and submitted in a timely fashion. Quarter after quarter, his performance review noted him as the best developer in the building.”

What’s surprising is not that this is possible (though Tim Ferris, author of the best-seller the 4 Hour Work Week should get in contact for a case study), or that someone would try it.  It’s certainly not surprising that Bob was fired.  What’s surprising to me is that “Bob” got away with it for a long time, and may never have been detected had he set up his VPN properly to make it look like the connection was coming from his home (and, as a telecommuter, actually watched his cat videos from home, rather than come into the office).

I’d love to know if the organisation that Bob worked for is now looking at an “official” outsourcing the role – clearly his tasks were location independent and results based, and Bob’s “results” were the best in the organization at 20% of the cost.
What are your thoughts – is Bob the hero or the villain in this story?  And assuming his employment prospects as a developer are dim now, what career should Bob move into?