A simple thought for today. Boring is very often more profitable than exciting. In the long run that is.
In the short run – exciting stuff is profitable. You build something rad. People say – this is rad, better get me some o’ this. Your price is high, they buy it and tell all their friends. But then…..
Tom, Mary and Ben like this exciting stuff so much, they wanna make a cool thing just like yours, and make lots of money doing it and also quit their ‘boring’ job.
So Tom, Mary and Ben all start their me too versions of your cool thing. They too make some good money doing their version of said cool product. And because this product is so cool, so visual and so omnipresent in the public arena, everyone wants to come play. All of a sudden there are a zillion variations of this cool stuff. Prices are forced down. The industry becomes unprofitable, all because it is so cool.
Joe has a much more boring product. In fact consumers don’t even know about his company. He makes a widget which goes into Tim’s final product. He’s a supplier. Tim likes dealing with Joe, because other business things are more important than emotion, coolness and consumer sentiment. Things like reliability, service and consistent delivery to expectations. So Tim is loyal to Joe, and Joe makes exceptional business margins. Because Tim is way to busy focusing on the consumer side, to go changing suppliers of widget X every five minutes.
Joe’s business is a boring one – we don’t even see it. But Joe has a great business. Joe is rich.
