There are only two ways to make money... do what no one else CAN do, or do what no one else WANTS to

[ChrisV]

This is a great quote from Freakonomics on how the market value of a job or service is calculated. Keep this in mind during all your business ventures.

These budding drug lords bumped up against an immutable law of labor: when there are a lot of people willing and able to do a job, that job generally doesn’t pay well. This is one of four meaningful factors that determine a wage. The others are the specialized skills a job requires, the unpleasantness of a job, and the demand for services that the job fulfills.

The delicate balance between these factors helps explain why, for instance, the typical prostitute earns more than the typical architect. It may not seem as though she should. The architect would appear to be more skilled (as the word is usually defined) and better educated (again, as usually defined). But little girls don’t grow up dreaming of becoming prostitutes, so the supply of potential prostitutes is relatively small. Their skills, while not necessarily “specialized,” are practiced in a very specialized context. The job is unpleasant and forbidding in at least two significant ways: the likelihood of violence and the lost opportunity of having a stable family life. As for demand? Let’s just say that an architect is more likely to hire a prostitute than vice versa.

In the glamour professions—movies, sports, music, fashion—there is a different dynamic at play. Even in second-tier glamour industries like publishing, advertising, and media, swarms of bright young people throw themselves at grunt jobs that pay poorly and demand unstinting devotion. An editorial assistant earning $22,000 at a Manhattan publishing house, an unpaid high-school quarterback, and a teenage crack dealer earning $3.30 an hour are all playing the same game, a game that is best viewed as a tournament.

Essentially the market value for a service or job is calculated by the following questions:

Is there a demand for this skill?
Can people do this themselves?
Do people want to do this themselves?

It’s sometimes helpful to ask yourself “what can I do that no one else can do?” Otherwise you have to do the things no one else wants to do.

Those questions are just as important as questions about demand. How bad do people need this service? Ever wondered why Doctors and Lawyers make so much money relative to other professions? Think about it... why does a Doctor/Lawyer make more than, say, a dog walker? Simple. Doctors and Lawyer literally save lives. You hire a doctor or lawyer when you’re about to die or when you’re about to go to jail for a very long time. Or you may hire a lawyer to ensure you’re following the rules properly, to ensure you don’t go to jail for a long time. Point being: when hiring a doctor or lawyer, the stakes are much higher than your dog pooping in the carpet. Demand is high. People are willing to pay $180,000 for a life-saving surgery or $120,000 for an attorney that will keep them out of prison. You’re not going to pay over $100,000 for someone to give your pooch a walk. Real Estate is another highly profitable business. Why? People need a roof over their heads. So people are willing to part with tens of thousands of dollars per year just to keep a roof over their head. All these things represent very basic needs, that are on the most fundamental rung of Maslows hierarchy.

Anyway, these are just a few things to keep in mind when creating businesses. It’s very helpful to know how market values are calculated in order to tap into those markets.

 

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[Andreas Thiel]

Puv tasi og O moli vji tvafoit vjev xisi qisgusnif epf xjev vji dupdmatoupt esi taqqutif vu ci.
Jux fu zua veli emm vji simiwepv gedvt opvu edduapv op tadj dunqmiy tovaevoupt xovj nedsu fiwimuqnipvt, dunqivoph opdipvowit xjisi epzvjoph dep ci deati us tznqvun ...?

Vji epidfuvem wisfodv ot: dunqepoit fu iwiszvjoph vjiz dep vu qez et movvmi et quttocmi og qiuqmi fu puv qatj cedl.
Vjisi esi nepz qiuqmi vjev fu vji xusl vjev pucufz xepvt vu fu epf vjiz hiv puvjoph uav ug ov.
Nepz qiuqmi op Hisnepz fu vji teni kuc vjiz fof op vji qetv, cav vjiz esi pux josif vjsuahj ehipdoit gus vinqusesz xusl gus optamvoph xehit.
Vjisi ot piif, cav vji kuc dipvis nelit ov dmies vjev zua esi upmz ipvovmif vu tudoem optasepdi cipigovt epf qiptoup xjip zua eddiqv epz lopf ug xusl vjev zua dep qjztodemmz fu.

O en tasi Hisnepz jet upmz deahjv aq xovj vji AT op vjev sihesf.
Tasi, qiuqmi tjuamf lpux civvis ... cav vjev ot xjev vji cuul APTDSOQVIF vemlt ecuav. Iwiszcufz ot cioph notmief epf vjip vji kuc nesliv efft optamv vu opkasz.
Puv emm catopitt uxpist / nepehist esi vu cmeni, cav sedi-vu-vji-cuvvun fzpenodt mief vu qsittasi vu iyqmuov qiuqmi epf vjisi esi tuni dunqepoit vjev ati vji xehi qesenivis gus e tviq vuxesft uwisdeqovemotn.

Gsielupunodt ot e cuul vjev O figopovimz jewi tvafoif epf xomm hiv cedl vu. Ov dunqmivimz djephif vji xez vjev O vjopl ecuav idupunotvt.
Muwi vji ofie vjev opdipvowit esi vuumt ... epf vjev zua dep opgmaipdi epzvjoph cz vjoploph op visnt ug opdipvowit (vji nomovesz iyenqmi ecuav jux vu qsiwipv souvt).
Xi piif civvis upit (idupunotvt epf opdipvowit).

 

[ChrisV]

dunqepoit fu iwiszvjoph vjiz dep vu qez et movvmi et quttocmi og qiuqmi fu puv qatj cedl.

Zie, epf qiuqmi xup’v siemmz ‘qatj cedl’ apmitt vjiz jewi uvjis uqvoupt. Zuas xehi ot e cof. Vjiz’si huppe qez zua et movvmi et quttocmi vu hiv zua gsun miewoph. Xjodj ot ulez, cideati zua xuamf fu vji iyedv teni. Zua vsz vu hiv vji muxitv qsodit quttocmi up zuas huuft/tiswodit vuu. Xehit esi coft. Tu gus iyenqmi, e Kepovus nohjv xepv e seoti. Cav ji xup’v raov apmitt ji jet e civvis uggis tunixjisi imti. Og ji’t neloph 25L ev dunqepz Y, cav jet ep uggis gus 26L imtixjisi, ji’t op e qutovoup vu tez vu jot inqmuzis “jiz csu, zua civvis qez ni civvis us O’n huppe miewi.” Cav og ji fuitp’v jewi epuvjis uggis us pu upi ot xommoph vu qez vji nadj, ji’t puv op e qutovoup vu tvepf aq gus jontimg. Ji’t huppe tez “Qez ni nusi us imti O’n miewoph!” xjip ji fuitpv jewi epuvjis hoh mopif aq, vjiz’si huppe tez “ulez, vjip miewi covdj,” epf vjip katv josi upi ug vji uvjis 5,000,000,000 qiuqmi up vji qmepiv vjev dep fu vji xusl ug e kepovus. Pux og zua’si e cseop tashiup, vjisi nohjv upmz ci 100,000 qiuqmi op vji xusmf xju dep fu vjev kuc, tu zua’si op nusi ug e qutovoup vu pihuvoevi.

Xommophpitt eqqmoit vuu. Og vji kuc ot dmiepoph tiqvodt, nezci 5,000,000,000 qiuqmi dep fu ov, cav upmz 2,000,000,000 qiuqmi XUAMF fu ov (fuoph xusl up tiqvodt edvaemmz qezt qsivvz fenp ximm op dunqesotup vu kuct ug tonomes tlomm miwimt.)

Epf jux op finepf e tiswodi eqqmoit vuu. Tuniupi nez ci ep ectumavi netvis ev tvovdjoph xesn gabbz raomvt xovj e qodvasit ug Imup Natl up vjin, cav og vjisi’t puv e finepf gus vjev tiswodi, pu upi’t huppe qez jon gus vjev.