Today’s letter starts with a discussion of what a resilient livelihood is, and why it is a good thing to have.
We’re also lucky to have a dispatch from our security correspondent Marcus Wynne on how the Burning Man (it’s a massive 50,000 person festival in the desert) handles security.
At the end of the letter is a very smart approach to building a “lean” dairy farm by F.W. Owen. I think being “lean” is essential to business resilience and your future success. It’s definitely worth a read.
How To Thrive: Build a Resilient Livelihood
Over the weekend in Aspen, I had some great discussions with young men and women looking for ways to build a better future for themselves. Naturally, since we live in the real world, the discussion eventually gravitated to the best ways to make a living in today’s rapidly changing environment.
In addition to specific recommendations that were unique to their circumstance, here’s one suggestion I had for them:
Don’t focus on a job, career, pension, government payment, or investment.
Instead, build yourself a resilient livelihood.
Here’s what a resilient livelihood is and why it is important.
A resilient livelihood is achieved by diversifying your income. To be resilient, you need to get your compensation from many small, and very different, sources. It’s also a livelihood where you aren’t dependent on any one source (customer, product, service, or category).
Here’s an example of a resilient livelihood from one of my favorite farmers, Sepp Holzer. Sepp sells 30-40 different products and generates a multi-million dollar income from his 40 hectare (hillside) farm. Sepp explains why this is good in his own words:
I have built ponds, terraces, and gardens, kept fish and wild cattle, I have grown mushrooms, set up an alternative tree nursery and so much more. Despite the fact that there are many different areas a farm can specialize in, it was important to me that I did not focus on any one source of income. I wanted to remain as flexible as possible, so that I would always be able to react to changing market conditions…. Over the years, this decision has been proven right again and again… Since then, I have been able to double the original size of the Krameterhof (his farm), whilst many of my critics have had to give up their farms….
The lesson here is that many small incomes from a diverse number of sources will allow you the flexibility to meet the needs of a rapidly changing or turbulent environment (farming is a very uncertain business, and Sepp was operating w/o the subsidies most farmers get).
It’s important to note that a resilient income is very different from a “robust” livelihood. A robust livelihood is income from a “safe” source or a small number of sources such as:
- A big company. A job or a pension.
- A government. A job, a pension, or a subsidy.
- A financial portfolio. Hedged or in safe assets.
A robust income is pretty good at keeping you housed, fed, and clothed during normal times. However, in turbulent times, “safe” companies, governments, and financial systems can become just as vulnerable to failure as anything else.
This is a lesson that applies to communities too. We saw this with Braddock, PA and the catastrophic effects of its reliance on “safe” incomes from the steel industry.
How do you diversify your income to make it more resilient?
Explore things you can sell or do to make an income from a new source, even if you don’t need a new source of income right now. Try them out in the marketplace. Turn a hobby into a micro-business. Follow your passions and have fun.
I think you’ll be surprised by the results and you will be glad you did this in the future.
How Security at the Burning Man Works
How does an ad hoc security system work? Our security contributor Marcus Wynne did some investigation and has this report.
Problem: Resilient communities will require a resilient and innovative approach to security in an increasingly insecure environment.
Solution: Create a flexible approach to security management that supports and upholds the principles of resilience and sustainability while providing the necessary range of security to the community.
The Burning Man Festival held in the Black Rock Desert of Nevada is one of the largest intentional communities. It’s a temporary autonomous zone that, for nine days, constitutes one of the largest cities in NV with a population around 50,000.
Significant security issues for the Burning Man community:
- Search and rescue. Finding and helping lost or extremely intoxicated people. Helping those overtaken by physical demands of the high desert.
- Mediation of community conflicts. Usually drunken arguments to generator noise or out of control parties.
- Liaison with local and federal law enforcement. Burning Man falls within the purview of federal, state, county and local law enforcement on legal enforcement issues.
In direct response to the issues, the Black Rock Community started the Black Rock Rangers, a volunteer organization that focused first on search and rescue, then conflict resolution/mediation, and then a buffer/moderator/mediator between “official” law enforcement and members of the Burning Man community.
Significant elements in selection, training and mission of Black Rock Rangers:
- Volunteers must have participated in at least one previous event as an attendee.
- Volunteers must embrace and support the community values of radical self-reliance and radical self-expression and the inherent and implicit values of same.
- Volunteers must complete required training in first aid, communications and most importantly, role-playing in complex conflict mediation.
- Volunteers must do an apprenticeship with senior experienced Rangers and may be dropped at any time due to attitude, lack of support for community values, lack of judgment/maturity
Any member of the Burning Man community can sound the call for the Rangers: “Ranger, Ranger, Ranger!” which is taken up and repeated while the closest Rangers vector in on the disturbance.
The community supports the Rangers, who are of the community, and embody the ethos of “Protect and Serve.”
A “Lean” Dairy Farm
Being “lean” is an essential part of building a resilient business. What does being lean mean? I could give you a definition, but I found something better.
Here’s F W Owen’s “lean” approach to dairy-farming. He introduces his “lean” approach with this example:
At one time we milked 300 cows 3X, but now milk only 30 (and make more money than with the 300)
|Full line of machinery for tillage, row crop production, manure hauling, 3 or more different forage, storage and feeding methods, feed processing, feed mixing, cattle hauling.
|One small tractor, small skid loader, manure spreader and mower, hand cart, pitchfork, broom.
|Newer, dependable machinery.
|Older rebuilt machinery.
|Machinery purchased with borrowed money.
|Total fair market value of all machinery under $5000.
|Powerful pickup truck less than 5 years old with payments.
|No pickup or a well maintained 10 yr. old or older truck. No payments.
|Attempts to maximize production per acre. For example attempted corn yields of 150+ bu/A.
|No seed or herbicide purchased. A little fertilizer and lime purchased. Max. effort devoted to precise manure distribution by cows.
|Near constant use of 2 to 5 tractors and loaders.
|Tractor use usually a few minutes or less per day.
|Year around cow exposure to concrete stress & free stalls.
|Cow exposure to concrete limited to milking time and winter months.
|Little or no nutrients from pasture.
|100% of forage from pasture April 10 to Nov. 25.
|High Cost Structure
|Low Cost Structure
|Attempt to grow most forage and concentrates.
|Maximum use of very low-cost purchased feeds like shelled corn and coarse hay for winter feeding.
|Purchased feed tending to be high quality imported hay and exotic protein supplements like cottonseed.
|Purchased feed limited to cheap low quality hay and cheap local shelled corn.
|High level of dependence on agri business for products & services.
|Total lack of need for agri business products and services.
|Hire consultants for ration balancing, animal health, agronomy and financial mgt.
|All management functions handled by owner-operator with vet. principal advisor.
|Larger herds, 3x milking. 16 to 24 hr/day milking parlor schedule.
|Herd size limited to number owner can milk in 2 hours or less.
|High tech milking facility. Replacement value of over $100,000 dollars.
|Simple, home-built and maintained milking facility. Replacement value of less than $5000 total. Could be a stanchion panel bolted to two posts and a cheap used pipeline.
|Popular, high value, high index proven bulls used.
|Max. use of A.I. and natural service young sires.
|Frenzied, fast paced, toxic lifestyle.
|Slower sustainable life style.
|Focus on herd average and high individual cow performance.
|Herd average totally ignored as irrelevant to anything.
|Very strong temptation to ignore profit and seek maximum cash flow to service debt, pay employees and agribusiness suppliers.
|No cash flowing out except the electric bill and to buy low cost local shelled corn and rough hay for winter.
|Net profit potential per cow break-even or less. Herd size 100-400 milking.
|Net profit per cow of up to $800.00 Herd size up to 150 milking.
Your Lean Keen Analyst,
PS: The Resilient Communities survey we sent out generated 30,000 words of response! Wow. Really amazing. There’s lots of passion in our community. I’m reading through all of it to make sure we do the best job we can with this letter. Thanks again.
PPS: If anyone has lived in a resilient community in the past and has lessons/insights and best practices to share, please send them to me. I’d love to share them with the rest of the community.