Thursday, November 19, 2015

Hide or Learn

A good idea is not good enough for a good business idea. The tricky bit is finding something that can be monetized. To find a market, you need to find something where there is demand and the supply is restricted in some way. People need something that you can do or make, that they can't just get anywhere. 

If they can get it anywhere, it is a commodity. It may be useful but it is difficult to make money out of it. People who make money out of commodities do so either because they are much better than others at creating/extracting the stuff, or they are traders (i.e. they have lots to sell when supply is limited, and build up their lots when there is plenty).

So lots of discussion in monetizing will revolve around the 'thing' being unique, and the barriers to entry. How do you keep things secret? How do you entrench your advantage? In my view, this sucks the joy out of it. Two of the best books I have read in the last year show the advantage of being able to do things without fear of losing your advantage. To being at the edge of learning in the open.

Josh Waitzkin tells the story of Marcelo Garcia, a five-time World Champion in Brazilian Jiu-Jitsu. Unlike most martial artists who are very secretive, Garcia often lets people watch his training or even posts videos online. He believes that if people are trying to figure out what he is doing, they are playing his game, and he is the best at his game. If they beat him, it is because they have found a hole and he will learn from them. Losing is the best form of feedback.

Austin Kleon talks of how artists can learn from each other and says they should steal. Ordinarily artists go nuts if someone is stealing their technique. They will create art, but try to hide how they created the piece. Kleon & Garcia would argue that if someone steals from you and does it better, you will have learned something. The problem is, that kind of learning doesn't put food on the table. It may be a good idea... but it does make monetizing hard.

Garcia gets away with it because he is really good. If you back yourself enough, you don't have to be secretive. The thing you are doing or making isn't your competitive advantage. You are.

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