Capitalism rewards rare and valuable
(a short thread on this mental model)
🎉 It's also the first chapter from my new book invertedpassion.com/capitalism-rew…
1/ You create value when you fulfill the unmet desires of people better than the alternatives they have (from competitors).
2/ The idea that capitalism rewards things that are rare and valuable was proposed by @ScottAdamsSays in his essay on career advice where he recommended readers to master various skills until no one else has the mix that you have.
dilbertblog.typepad.com/the_dilbert_bl…
3/ The same applies to startups too.
A great example of building something that's rare and valuable is Facebook. Read about it in the full chapter here: invertedpassion.com/capitalism-rew…
4/ A fatal but common mistake that entrepreneurs make is misjudging what makes something valuable.
Many entrepreneurs start companies around their own passions and desires, but not many share their passion.
5/ Entrepreneurs are an odd bunch, what excites them isn't representative of the wider public
If you don’t understand what's valuable to others, you'll end up building products and services that nobody needs
As @paulg says, build things that people want paulgraham.com/good.html
6/ However, even if you end up correctly identifying a broadly shared desire or frustration, another costly mistake is to ignore how such desires or frustrations are currently being serviced.
(Why would customers switch from the tried and tested options to you, the unknown one?)
7/ Hence, value creation requires identifying what specific desires of people others haven’t yet figured out.
Doing this difficult.
But can you identify what’s rare and valuable?
8/ Incidentally, this is why my blog is called invertedpassion.com
That is, instead of being passionate about your own problems, start being passionate about other people's problems.
9/ That's it!
Read the full chapter here: invertedpassion.com/capitalism-rew…
The beautiful Illustrations are done by @sia_steel.
10/ I'll be posting one new mental model for entrepreneurs every week.
Here's the entire list of 60+ mental models that I'll cover in a year or so invertedpassion.com/free-book-ment…
Make sure you sign up for email updates on the book page.
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