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Never have a limit on your income
- aggieben 19y agoI get the point, but live performances by musicians are a pretty weak example. A performer can only do one performance at a time like a masseuse, but unlike a masseuse, a performer can service a very scalable number of people simultaneously. i.e., a performance musician is merely selling concert tickets rather than CDs. Tickets are less scalable than CDs, but can be sold with a much higher profit and don't need to be as scalable.
- dangoldin 19y agoBasically the same thing as what Taleb mentions in "The Black Swan" Some careers are easily scalable and others aren't.
- mattmaroon 19y agoThat may be true, but lack of scalability doesn't necessarily impose a limit on your profit. And touring is highly scalable.
- randrews 19y agoHmm. For the pen example, isn't it true that the pen manufacturer has a limit on their income? If they have a small shop that makes pens by hand, and you order a million of them, how are they going to fulfill the order? For CDs, same deal with the company that actually presses them, even if the musician providing the content is already done. If you sell a physical object, someone somewhere in the supply chain has a limited income, even if it's not you.
- pchristensen 19y agoAnd somewhere in the supply chain, there's the law of conservation of attractive profits.
- ojbyrne 19y agoIt doesn't really talk about competition. Since this is common sense, it's inevitable that people will pile into whatever business you're talking about until profits go to zero. If you're in a commodity business like, uh, pens, you're going to be worrying about the lower limit on your income - wishing you had one.
- dmm 19y agoThe author of this article is completely wrong. Providing a "hands-on" product or service does not limit your income. If you are a masseuse with a 10,000 person waiting list, your problem is very easy to solve. Raise your price. That will simultaneously reduce your waiting list and increase your income. The only limit on what you can make with a "hands-on" skill is the amount people are willing to pay. The author needs a basic understanding of supply and demand relationships.
- cstejerean 19y agoyou can't just keep raising your price forever. There is a balance where you can make the most profit.
- mattmaroon 19y agoYou can raise it quite a bit when you have a waiting list of 10k people.
- kirubakaran 19y agoAnd raising it beyond a reasonable amount (with people still wanting it) makes you a purple cow. This makes the demand go up even higher.
- mattmaroon 19y agoThis happens all the time in the real world. A chef/hairstylist/douche bag who makes choppers gets on television and their prices increase drastically. A website that only has 10 ad spots gets a waiting list of 100 customers and increases their rates.
- mattmaroon 19y agoThis article is all around dumb. Whoever wrote it doesn't appear to understand either the laws of supply and demand, or the music industry. Or he's just denying to himself that his site, which is based on the CD industry, is about to go the way of the cassette tape. Concerts are highly scalable. The Rolling Stones sell out one arena after another full of 50k+ people. Their "A Bigger Bang" tour grossed $558m in 147 concerts over about 2 years. That's far more than any artist ever made in 2 years off of CD sales. And true, I guess they can't scale much beyond that, but any other musician can scale all the way up to it and none have. But placing a limit of $558m on your income seems fine to me.
- motoko 19y agoBetter translation: Don't sell your time.