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Wednesday, August 26, 2020

Holding the Knife

The market decides the price of pie. The one holding the knife decides the size of the slices. Price is not value. Not all good ideas are good business ideas. Value is deeply personal. To become a good business, something has to depersonalise and scale. To create a market, you need something strangers recognise and trust. Something that lots of people value, but that not lots of people provide. You need a product. You need the required capital. Then you need a container. A pie dish. The market will help find the price based on how many people want pie, and how many people sell pie. Based on what the alternative choices are to pie. Once sold, how the profit gets split depends on who holds the knife. There is no internal market. Only the ability for people to stay or go. The person with the knife has to (1) pay people enough to stay if they want them to, and (2) create an illusion of the pie pieces relating to their contribution. The person with a knife has to pretend in a way markets don’t have to. Markets simply reflect supply and demand.



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