A few days ago I read a statement that went like: “The mega corporations are run by finance departments. Everything else is secondary to them.”
I then had also an idea that engineering only for a while runs the business. Engineering is the inception; marketing is what gets you sales, so at the start engineering is what gives the inception. Marketing helps you sell, and then I don’t get this finance part.
Basically after each stage you have a bigger thing to deal with. At the start you don’t have any product to sell; you are in product poverty so you are like, “Hey I need to be an engineer and build something.” Once you build something you are in sales poverty so you want to do marketing but once you do marketing you realize, “Oh fuck, my cost to acquire a customer is too much. I will never be profitable.” Now you need to do finance.
Sooner or later you just turn into a capital management machine. We can clearly see this pattern in startups also, where after the seed round they are encouraged to go all in on marketing and then when the investors think, “Okay the marketing phase is complete now,” they are put into the finance mode. That hey now you have to be responsible with your capital and act less like hyper-scaling degenerates.
So that also means that profitability can sometimes be ignored during the nascent stage of the business. You can sometimes afford to just think about product and marketing until you reach the stage that maybe you can kick the can down the road when it comes to finance.
Another banger I heard was: “You are supposed to sell the problem not the product.” And selling the problem is really cool because if the problem gets highlighted enough, you can come up with multiple solutions from multiple angles to address the same problem. Even if you fail this time, you have multiple attempts left. You create a lot more optionality for yourself if you highlight the problem. If not product, you can do marketing for others if you are able to deal with the problem popularization.
Just a few days ago I realized that attention exists for some topics and you are supposed to divert it to yourself somehow. I think spending will exist for some problem and you have to divert it to yourself. For example attention exists for let’s say conflict or war so if you talk about war you will attract that attention. Same way I think spending will exist for let’s say food or comfort. If you highlight problems around it, you will get money. So sell your problem as something close to what people would already want to sell or maybe it is actually the problem exactly that people want to spend on.
Basically when you sell just a product, the position you are taking is, “Hey this problem exists and this specific angle is the only way I am going to solve it.” Well that’s a lot of communication, isn’t it? If you just keep talking about the problem, if you keep publishing the problem, people will look for the solutions themselves and if you stand out they will take you. Of course you can also, on the side, run promotion of your product too but you have to understand the nuance here.
Like if you are an investment advisor, instead of just talking about the new active fund you created, if you keep talking about how passive funds are just not working:
- how Japan from the 90s has not returned anything
- how lack of active investing is the unwinding of passive fund
you automatically attract interest towards active funds and you are an active fund so you will be the beneficiary of it. Plus your product is such a tiny little thing no one knows about so the amount of cognitive resources you will need from the next party to be able to convince them is huge. If you talk about things they already know, such as passive funds, you will have a way better time. It is actually the path of least resistance.
When you lead with the product, you’re asking your audience to do several things at once:
Understand that a problem exists
Accept that your specific solution is the right one
Trust you enough to buy it
That’s a massive cognitive lift. People are busy, skeptical, and overwhelmed.Plus how much can you even talk about your product? Is it really something that special that you can just keep finding angles that are interesting enough that you can talk about it and people also give you some attention? No that’s not how it works but if you keep talking about the problems it addresses, you have so much more gunpowder. Your product has few features, few user personas, and few user journeys. How long can you keep talking about it? How can you keep attracting people using it? On the other hand the problem is such a rich topic:
- it has history
- it has so many contributors
- it has so many topics that already have generated interest
- it has current events unfolding around it
- it has thousands of people making predictions about it
- it is rife with accumulated interest in thousands of different pockets
While your product has none. That is why it has no sales, right? So you tell me, would it be wiser to talk about your product and start from scratch or would it be easier to just divert attention and money from places where it already exists?
Another point is when you keep talking about the problem itself, you can enter with many many products. You have seen countless YouTubers talk about a certain issue or problem and then enter with their own merch. You can see hair brands talk about hair problems and then come up with products for:
- curly hair
- straight hair
- fizzy hair
- dry hair
- and what not
Basically the engineering part of the whole game is way more or hyped than we currently understand. We have seen thousands of stories where the founder creates something that never existed before, something so exotic, something so clever, but that does not seem to be the requirement. Popularization of a problem rewards you enough. And after enough time has passed just switch to finance as the modus operandi and you will survive fine.
The point is that the bulk of humanity and the attention it devotes to it is extremely dumb and stupid. Being a mega engineer kind of works against you because whatever you will create might be useful but very hard to communicate and rally your attention around. On the other hand making things simple and staying at the level your audience is helps a lot commercially. So if you’re starting from a clean slate, fuck engineering. You can outsource a product, just popularize a problem, and come up with products. Either something that already exists or make something novel by hiring some engineer or partnering with them, and just sell things.
And after that cash conversion cycle and capital management are your best friends to keep printing money.
- Popularize a problem
- Source product
- Manage CCC and Capital
>win
For me the problems I’m choosing to popularize are:
- How hard it is actually to get AI running for your own custom needs
- How fuzzy the whole information ecosystem is if you are trying to take financial decisions
- How bad the mental models are for most of the businesses.
For them the products I can push are:
- agent platform
- investment fund
- info program
I can either make my own, source and white label or partner with someone who is already flourishing or maybe just get sponsored by someone.
For the AI thing we have to understand that maybe the models are already smart enough to get a lot of things we need but we are just not able to get them out of it. The problem is AI exists; it can do things and we are not able to get the results we want out of it. How do you get the result you want? Is the problem I should be highlighting and what are the things that are standing in the way?
- Insufficiency of the context window
- Another is the training bias.
- Another is the bad prompts you are giving.
I can get 100 more problems if I talk about it with AI and I can understand why it is not able to give the results the user needs and wants. Just talking about it and highlighting that problem well enough can give me the platform I want in the AI space. I can also target individual characters, like “Hey what to do if you’re a doctor, engineer, artist, or business owner if you are not getting the results you want from AI?”
For the finance and business thing there has been an explosion of content around both of the niches but the quality of it has not been particularly nice. The information sources are way too many to deal with them individually so you need curators who you can trust to provide you proper information and insights.You need to know things like:
- What is happening?
- Why is it happening?
- Is it relevant?
- Is it significant?
- Is this going to affect me?
- How severely is it going to affect me?
- What should I do if I am in the crosshair?
So I aspire to be a creator who is able to answer all these questions that keep popping in their head and help them reduce risks that might emerge from ignorance about things that affect them. This is a much harder lane to walk because you are solving a very ambiguous and subconsciously recognized problem, unlike the AI part where they know that, hey, I am not getting the output. This is very subliminal.