I don’t charge for this email.
"Of course not!" You might say.
But maybe I will some day.
In which you might say to yourself, “Of course you do!”
So what gives? Why not charge now? Or rather, when should I charge?
Understanding where value is created and extracted is a key piece to seeing, developing, and building our brands in the modern age.
As we shift more from physical products (based on supply and distribution costs) to digital products (scalable, free, copyable to infinity) — We’ll see new forms of arbitrage, new economic models, new species of value being traded.
I believe this is at the core of a lot of the angst entrepreneurs and artists feel today. “How” to charge for your services, and the competition in every market due to competition becoming global vs. local.It’s almost the common joke of the modern startup today.
“All this buzz, but no business model!”
This competitiveness on the internet, mixed with the ability to scale and repliclate anything digital drives down our costs, and price, massively. Even to zero in most cases. While we used to live in a world of product scarcity, we now live in a world in which much of our consumption is massively abundant.
The truth is there is more music, shows, blog posts, video, podcasts etc. than you could ever listen to. And these are all essentially free or very low cost (a la Netflix).
Competitive supply (at a low cost) + new filters for creating friction (paywalls, subscriptions, marketplaces, advertising) drive our decision making about how we charge for what we create.
Typically, anything of value is something that is scarce. The greater the scarcity, the higher the value (think: Taylor Swift tickets).
But when all things are abundant, and often free — to make something scarce, you either need to find an industry where there has yet to be abundance at a low price (difficult to find) or make something that clearly stands out and is worth paying for to a customer.
The only relief that the modern artist finds is that their cost structure, too, has massively declined. If you want to shoot youtube videos, you only need an iPhone and some free editing software, whereas before you might have needed expensive cameras and an entire crew.
But, this is the same double edged sword that unleashed the abundance of media of which is now competitive with yours.
Which brings me to my main point: the real scarcity of today’s world is attention. It’s the only thing we can really arbitrage.
Last week I wrote about how companies are after the small sections of our attention. The moments in between.
Today I’m talking holistically about our attention. The full lifetime of our attention. Which, inevitably runs out. Which means it comes at a premium. It’s finite in it’s nature, which is why we can never consume all that the internet has to offer.
So the maker of today has two jobs, and you need to do both:
Create something worthy of our attention.
Arbitrage that attention to something people will spend money on (that delivers on the value promised).
Even the election was an attention arbitrage. And Trump had been practicing this for decades. He won the attention war. And he arbitraged it to get into the White House. Interestingly enough, he’s also helped drive attention for thousands of other media creators, with entire shows spawning from these topics. All of which have leveraged the interest and attention of the presidency into something of value that people pay for.
You could also argue that Trump took the attention of his real estate business and arbitraged it into his T.V. Shows, which was then arbitraged into politics.
So now we see the cornerstone of being able to create value today is to capture attention and maneuver that attention into something valuable. Inherently we sort of understand this, and I believe it’s why people are so interested in growing their followings on social media. They believe that as they grow that attention, something of value can come from it. This is true, and is working for many who built real attention from an audience.
Now that we see attention is a necessary component for building value, it doesn’t make it any easier. We all have that feeling like it’s getting harder and harder to have our voice heard in the noise.
I think at the root of that feeling is a Chicken and Egg scenario. You need to create value to get attention but you also need attention to create value.
What to do!
I think this is where the previous generation is getting stuck. It’s a new era. Your career path is not set in stone, it will shift many times. And with each shift comes a leap that needs to be made.
And each leap has no guarantee of working out. In fact, the odds are probably against you. If you want to be in the business of selling something you create, you have to have faith that eventually it will pay you back. And accept that it might not.
Because the trick to the chicken and egg problem is often building the attention first, and focusing the value second.
Which is the route many of the “no business model” startups are taking.
On the larger scale: Snapchat built a free app that created value, and built enough attention to arbitrage ads against that attention. While they’ve gone public, it’s still actually possible that the attention they’ve garnered will pay them more than their costs. Right now they’re still propped up by investment.
On the small scale: You’ve got the blogger who uses the following they’ve built talking about interior decorating to partner up with brands as affiliates and take a percentage of each purchase from their website.
The key in both scenarios is the attention. No attention, no arbitrage.
The hard part now is that leap.
Starting something new; Snapchat, a blog, where you have no idea if it will work, and for how long you will have to work for free to see a return if at all. The main idea is to build attention and trust, the secondary idea is to get a return on value.
This is where the younger generation is seeing the money moves in a freer form way of working. Whereas previous generations, understandably, saw a much more linear view of money and making money.
I fix your car, you pay me cash.
Newer entrepreneurs and artists are embracing Karma over economics. Which is what baffles others. It’s so NOT logical. It’s too much trust. Trust that if they continue to create something of value, they’ll be able to charge for it. Trust that somehow some way you’ll get a return.
But the truth is today’s artists aren’t putting their trust in a business model. (Still scary for me to say), they’re putting trust in the accruing value of their product.
Trust that they can eventually gain attention. Trust that enough people will eventually pay for something because they trust you.
In the music business you might make songs for free for years and just post them online free. Then eventually people buy tickets to your show. Or eventually it’s licensed to a video game. Or eventually you sell yourself as an MC for a charity event.
Their value is built over time, an investment in building the asset of attention.
So what are we to do? Work for free and hope we never get paid?
My take here is that, like any good investment portfolio you want to have it balanced.
The way I believe we balance this new way of working is focus on how we can acquire capital in the short run. This means selling something you know that people buy, working at a company, freelancing, running a service or product you can get paid for today.
All the while developing a way to build value for others over the long run. The best advice I’d give you here for where to start is to be yourself.
Attention is scarce, but so are you. You are a totally unique person with a totally unique skillset and perspective. If you can allow yourself to naturally produce work that is true to you, I find that is the easiest way to build attention.
I think of the author of Hillbilly Eulogy, who simply told his life story — which was compelling to others enough to get him paid. Now he’s looking at politics.
Today we look for unique voices. Those with opinions, those who have spent time developing their skills and their voice.
The way to stand out is to be unique. The way to be unique is to be yourself. So become an investor in yourself. In your current cash flow and your future skills. Build value for others by focusing on doing something that only you can do or make.
The tools are free, but still most people are scared to make the leap. Everyone can write an email. But they can’t write THIS email.
I wrote this email.
So when I do ask for $5 a month, people might pay.
Because where else will you get to hear this unique voice?
People will give you their attention, if you develop yourself in your craft and share it, because you are the last scarcity worth paying for.
And trust me, it’s hard work.