Notebook

Monopoly markets dominated by a few major players severely limit your options. Markets where years of relentless competition have produced numerous underdogs are dangerous. Even fully competitive markets offer little hope, as you cannot compete against established giants. These markets are typically filled with very similar competitors, battling over prices and minor differences. This saturation makes it difficult to enter such markets, and even existing businesses within them struggle.

When markets shrink, that is often a sign of deterioration. Whenever the number of agents and purchasers in a market decreases, business growth stalls. People cut costs and unnecessary expenses get reduced. All businesses in that market will suffer.

Identifying a Critical Problem: Focusing on the Right Issue After identifying your target audience, you can begin searching for their pain points. The beauty of niche markets lies in the fact that the issues they face are specific and shared among members of the niche. Addressing a common issue will benefit many individuals. You already have the right people; now you simply need the right problem.

A few weeks into teaching on a full-time schedule, she noticed things that started as nuisances but quickly became painful problems. The teaching part of her job was great and fun, but certain formalities took way too much additional time.

So, we released it to the public, built a landing page, and waited. Nothing happened. One or two people signed up for the free trial, but there wasn’t much else. We hadn’t done any marketing, and we hadn’t made any sales. The service just sat there, idling.

And then, one day, everything changed. In a comment to a Facebook post about how teachers dealt with feedback, Danielle dropped the link to our product with an explanation of how she used it. Teachers started to respond, asking for more details; they checked out the program and came back to share their newly found discovery on social media.

that fueled the growth of our business from its first few users to thousands of customers a couple of months later. It was surreal, but we had tapped into a highly active tribe. Once we understood that, we didn’t need to do much when it came to marketing our product: our users would do most of that for us.

Tech founders—and I count myself as one—focus on products because that is what we use to solve our problems. After all, when you run into a challenging task, what do you look for first? An in-depth scientific explanation for the epistemological essence of the task? Or a tool that will do the job for you seconds after you install it?

Many successful bootstrapped businesses start with an audience, a specific niche. They find their customers’ critical problems and provide valuable solutions that people gladly pay for. Their product is centered around continuously providing value to new and existing customers. Audience, problem, solution, and product can be looked at individually.

Successful businesses are built by addressing critical problems for an audience willing to pay for solutions to their issues. The Preparation Stage is when you make these foundational choices. Once in motion, a business has certain inertia that makes these decisions difficult to alter. While pivoting your business into new markets can be the right move at times, it requires additional effort. This is why it’s wise to invest significant time upfront to get things right initially. ...

His mind was more or less pure, with no knowledge of those “unspoken words” and never “contaminated” by real social life. The world as seen through a child’s eyes is unreal; it is an imaginary world that has been instilled into their minds. When they grow up and encounter society in the future, they will discover that what they thought was true when they were children is absurd and ridiculous in reality. +++ ...

Hearing that the richest 5% of people own more than half of society’s wealth often leads to the conclusion that this is unfair. An experienced programmer might also find this unfair because the top 5% of programmers write 99% of the world’s excellent software. +++

You do what people need or want, and then you get paid for it. Some people earn more because they do it better. Superstars make much more money than regular actors, even though the latter may have the same talent as the former. When people choose which movies to watch in the cinema, they tend to be attracted by superstars. Of course, making things that people need is not the only way to make money. Robbing banks, extorting bribes, and monopolizing markets can also bring in money, and these methods are often used by some wealthy individuals. However, these means do not represent all wealth, nor are they the main cause of income inequality. The difference in skills among individuals leads to differences in income, which is the primary reason for income inequality, just like Occam’s Razor principle in logic states: the simplest explanation is the best one. +++ ...

Fear and anger make them lose their ability to think. They start to become particularly good at doing absurd things that harm their own interests. So, the first thing you need to learn is how to control these two emotions. +++

What you feel tells you nothing about the facts—it merely tells you something about your estimate of the facts.

Analyzing from the perspective of game theory, the contributions of employees to companies follow a parabolic curve, while wage levels continue to rise. This is why internet companies have a retirement age of 35. +++

The unlucky ones who were eliminated by competition have no voice; you cannot see their journey of heart and their thoughts. +++

Whenever you can in life, optimize for independence rather than pay. If you have independence and you’re accountable on your output, as opposed to your input— that’s the dream. A leveraged worker can out-produce a non-leveraged worker by a factor of one thousand or ten thousand. With a leveraged worker, judgment is far more important than how much time they put in or how hard they work. +++

If you don’t own a piece of a business, you don’t have a path towards financial freedom. If you don’t own a piece of a business, you don’t have a path towards financial freedom.

Ownership versus wage work. If you are paid for renting out your time, even lawyers and doctors, you can make some money, but you’re not going to make the money that gives you financial freedom. You’re not going to have passive income where a business is earning for you while you are on vacation. Without ownership, your inputs are very closely tied to your outputs. In almost any salaried job, even one paying a lot per hour like a lawyer or a doctor, you’re still putting in the hours, and every hour you get paid. ...