Saturday, October 22, 2016

Dry Cleaners

Most good ideas aren't good business ideas. The best book I know of on what makes a good business idea is Michael Porter's 'Competitive Advantage'. That is a great way to think about making money, but an awful way to think about life. A friend of mine in Asset Management said that he wouldn't care if the business he leads changed to being a Dry Cleaner. Like a Buddhist Sage, he is completely detached from the process, as long as it benefits his clients. The reason for this is other things in life are more important. The work is a muse.

You can aim to do the work you love, or you can use work to finance the time for things you love. Some fantastic ideas are not monetizable. Take journalism. Until Google came along, the engine for quality journalism was advertising. Quality journalism is a fundamental part of a well educated society and a functioning democracy. It is about as good an idea as you get. It was only monetizable because of it's competitive advantage in controlling the attention of others since we used to need to read via print magazines, and distribution constraints meant scale was needed to actually get the material into peoples hands. It cost me nothing for you to read this blog post whether you are sitting in Auckland, Durban, San Francisco, Delhi, Seoul, Edinburgh, Moscow or Lagos.

Detaching not because it doesn't matter
Detaching because other things matter

Trump doesn't need magazines to advertise. He has 12.7 million Twitter followers. Newspapers now compete with the globe. They have no way of controlling the supply or demand for their content. Advertisers can use Google which means instead of paying to shout at a big ambiguous audience, they can pay to speak directly to people who have already shown interest in what they are selling. That destroyed Journalism's engine room.

Sometimes you need to stop thinking about monetizing the great ideas. Find a Dry Cleaner to fund the things that matter to you.

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