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Puppet Entrepreneurship

by on February 4, 2021

easyDNS is pleased to sponsor Jesse Hirsh‘s “Future Fibre / Future Tools” segments of his new email list, Metaviews

Riffing off the latest Data and Society Report

Our friends over at Data & Society have published a new report that not only provides a fascinating glimpse into the evolution of the business of franchising, but also a potent metaphor to describe business and entrepreneurship in the era of Big Tech.

After analyzing data from franchise contracts, this report finds that the use of digital surveil-lance is an important axis along which franchise chains differ. On one hand, franchisors that do not closely monitor tend to rely on their franchi-sees’ skills, credentials, and entrepreneurship. On the other hand, chains that utilize remote monitoring technology tend to have lower skill requirements and impose more prescriptive contracts on franchisees. Most importantly, franchisors that maintain independent, remote access to franchisee computer systems exer-cise greater control over franchisee decisions than those of franchisors that do not maintain independent access to franchisee data. Since independent decision-making is a defining hall-mark of independent entrepreneurship, it would seem that franchisees subject to digital monitoring are something less than true entrepreneurs.

While this report is largely designed for an audience of policy makers and researchers, it provides a frame by which to understand the impact of surveillance and algorithms on the economy.

The report focuses on how relationships between franchisors and franchisees are increasingly mediated by algorithms, data, and surveillance. This fundamentally changes the power dynamics of those relationships, and necessitates a shift in franchise law.

The parallel is with the so called gig economy and the practice by companies to designate their personnel as independent contractors rather than employees, denying those people the benefits and protections they deserve.

In this case it challenges the notion that increasingly franchisees have that status in name only, but are instead so tightly controlled by the parent company that they might as well be store managers. Except they have to pay for the privilege of being so. All the risk with diminishing rewards.

However to what extent can the notion of puppet entrepreneurship extend to much of the economy as a whole? How many small businesses are now, thanks to the pandemic, just working for Shopify? Is this newsletter just an extension of Substack? Or is the following video just more shill for Amazon and Alphabet?

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