I’ve written before about the practical consequences of the Age of Abundance. Here’s Seth Godin on the same subject:
So how do you deal with the shortage of scarcity?
Well, the worst strategy is whining–about copyright laws and fair trade and how hard you’ve worked to get to where you are. Whining is rarely a successful response to anything. Instead, start by acknowledging that most of the profit from your business is going to disappear soon. Unless you have a significant cost advantage (like Amazon’s or Wal-Mart’s), someone with nothing to lose is going to be able to offer a similar product for less money.
So what’s scarce now? Respect. Honesty. Good judgment. Long-term relationships that lead to trust. None of these things guarantee loyalty in the face of cut-rate competition, though. So to that list I’ll add this: an insanely low-cost structure based on outsourcing everything except your company’s insight into what your customers really want to buy. If the work is boring, let someone else do it, faster and cheaper than you ever could. If your products are boring, kill them before your competition does.
Ultimately, what’s scarce is that kind of courage–which is exactly what you can bring to the market.
Read the whole thing. And this was written four years ago… If you’re not moving up in incredibly irreplaceable value, you’re moving down in infinitely fungible price.
Technorati Tags: disintermediation, real estate, real estate marketing
Richard Riccelli says:
RE: outsourcing everything except your company’s insight into what your customers really want to buy. If the work is boring, let someone else do it, faster and cheaper than you ever could.
Greg:
I agree in principle. But what is not accounted for in practice is how the out markets for commodity services are wildly uneven and price is an increasingly unreliable, often crude indicator of performance (at least in my current, direct experience).
Moreover, as process support becomes increasingly robust and cheaper (better, more accessible tools that break down walls between see and do) — and as tools more deeply integrate with creativity and expertise (seamlessly making ideas reality) — and as work becomes more personalized because we want it so and can make it so — it is ever more difficult to parse out where high-pay, high-value brain work should stop, and when price-driven, commodity hand work should begin. There are no craft-guild bright lines in the age of the internet or the business of creativity, nor do I mourn their passing all that much. And today journeyman skills define nothing. In Free Agent Nation it all tends to be black box. So recognition management, source building, and blink moment decision-making may in fact be the emerging high-value skill sets to command.
Understood. But all of that has real, and never-ending time value and opportunity (lost) cost that Seth (and you it seems) tend to ignore. It’s the lost wax of cost-benefit analysis in a Fast Company world. Not a whine but an observation in two questions: How much do you really outsource—more or less than 12 months ago? And over that time have you been doing more or less of everything? For me, less and more.
August 27, 2007 — 7:53 am
Greg Swann says:
> How much do you really outsource—more or less than 12 months ago? And over that time have you been doing more or less of everything? For me, less and more.
I agree, of course. We use two standards: First, will our doing — or not doing — a task make a mission-critical difference? I do all of our pre-press, but I print only the flyers. Everything else is farmed out to vendors who do much better work than I could. Second, will doing non-mission-critical work significantly impinge upon profitability. Even if I could so something better than a vendor or contractor, would my doing it take me away from more remunerative work? The last question leads in the general direction of our out-sourcing more and more.
The other factor that matters to us is how high on the food chain are we buying? We don’t like vendor relationships that ham-string us, so we tend to look for commodity solutions and instantly interchangeable technologies. We’re moving our virtual tours in-house, for example, because I don’t like having my tours held hostage. We’re interested in making a relationship with a photographer, but only if we own all the files, all the rights, everything. I’m delighted to pay you once. No way will I pay you forever.
Finally, we would never even consider having a 1040 employee. We want to deal with independent vendors or 1099 contractors. Entrepreneurs are hungry, and they’re easy to fire. We don’t do business with people who don’t have a clear idea why they need us. We’re getting better and better at managing contractor relationships.
August 27, 2007 — 11:45 am