Fixing problems isn't enough.

Numerous articles and how-to guides on value propositions focus on fixing consumer concerns.

Contrary to popular opinion, addressing customer pain rarely suffices. Win your market category too.

Core Value Statement

Value proposition usually means a product's main value.

Its how your product solves client problems. The product's core.

Answering these questions creates a relevant core value proposition:

• What tasks is your customer trying to complete? (Jobs for clients)

• How much discomfort do they feel while they perform this? (pains)

• What would they like to see improved or changed? (gains)

After that, you create products and services that alleviate those pains and give value to clients.

Value Proposition by Category

Your product belongs to a market category and must follow its regulations, regardless of its value proposition.

Creating a new market category is challenging. Fitting into customers' product perceptions is usually better than trying to change them.

New product users simplify market categories. Products are labeled.

Your product will likely be associated with a collection of products people already use.

Example: IT experts will use your communication and management app.

If your target clients think it's an advanced mail software, they'll compare it to others and expect things like:

• comprehensive calendar

• spam detectors

• adequate storage space

• list of contacts

• etc.

If your target users view your product as a task management app, things change. You can survive without a contact list, but not status management.

Find out what your customers compare your product to and if it fits your value offer. If so, adapt your product plan to dominate this market. If not, try different value propositions and messaging to put the product in the right context.

Finished Value Proposition

A comprehensive value proposition is when your solution addresses user problems and wins its market category.

Addressing simply the primary value proposition may produce a valuable and original product, but it may struggle to cross the chasm into the mainstream market. Meeting expectations is easier than changing views.

Without a unique value proposition, you will drown in the red sea of competition.

To conclude:

1. Find out who your target consumer is and what their demands and problems are.

2. To meet these needs, develop and test a primary value proposition.

3. Speak with your most devoted customers. Recognize the alternatives they use to compare you against and the market segment they place you in.

4. Recognize the requirements and expectations of the market category.

5. To meet or surpass category standards, modify your goods.

Great products solve client problems and win their category.

Steve Jobs' initial mission at Apple in 1997 was to destroy. He killed the Newton PDA and Macintosh clones. Apple stopped trying to please everyone under Jobs.

Afterward, there were few highly targeted moves. First, the pink iMac. Modest success. The iPod, iPhone, and iPad made Apple the world's most valuable firm. Each maneuver changed the company's center of gravity and won.

That's the idea behind Schwerpunkt, a German military term meaning "focus." Jobs didn't need to win everywhere, just where it mattered, so he focused Apple's resources on a few key goods. Finding your Schwerpunkt is more important than charts and analysis for excellent strategy.

Comparison of Relative Strength and Relative Weakness

The iPod, Apple's first major hit after Jobs' return, didn't damage Microsoft and the PC, but instead focused Apple's emphasis on a fledgling, fragmented market that generated "sucky" products. Apple couldn't have taken on the computer titans at this stage, yet it beat them.

The move into music players used Apple's particular capabilities, especially its ability to build simple, easy-to-use interfaces. Jobs' charisma and stature, along his understanding of intellectual property rights from Pixar, helped him build up iTunes store, which was a quagmire at the time.

In Good Strategy | Bad Strategy, management researcher Richard Rumelt argues that good strategy uses relative strength to counter relative weakness. To discover your main point, determine your abilities and where to effectively use them.

Steve Jobs did that at Apple. Microsoft and Dell, who controlled the computer sector at the time, couldn't enter the music player business. Both sought to produce iPod competitors but failed. Apple's iPod was nobody else's focus.

Finding The Center of Attention

In a military engagement, leaders decide where to focus their efforts by assessing commanders intent, the situation on the ground, the topography, and the enemy's posture on that terrain. Officers spend their careers learning about schwerpunkt.

Business executives must assess internal strengths including personnel, technology, and information, market context, competitive environment, and external partner ecosystems. Steve Jobs was a master at analyzing forces when he returned to Apple.

He believed Apple could integrate technology and design for the iPod and that the digital music player industry sucked. By analyzing competitors' products, he was convinced he could produce a smash by putting 1000 tunes in my pocket.

The only difficulty was there wasn't the necessary technology. External ecosystems were needed. On a trip to Japan to meet with suppliers, a Toshiba engineer claimed the company had produced a tiny memory drive approximately the size of a silver dollar.

Jobs knew the memory drive was his focus. He wrote a $10 million cheque and acquired exclusive technical rights. For a time, none of his competitors would be able to recreate his iPod with the 1000 songs in my pocket.

How to Enter the OODA Loop

John Boyd invented the OODA loop as a pilot to better his own decision-making. First OBSERVE your surroundings, then ORIENT that information using previous knowledge and experiences. Then you DECIDE and ACT, which changes the circumstance you must observe, orient, decide, and act on.

Steve Jobs used the OODA loop to decide to give Toshiba $10 million for a technology it had no use for. He compared the new information with earlier observations about the digital music market.

Then something much more interesting happened. The iPod was an instant hit, changing competition. Other computer businesses that competed in laptops, desktops, and servers created digital music players. Microsoft's Zune came out in 2006, Dell's Digital Jukebox in 2004. Both flopped.

By then, Apple was poised to unveil the iPhone, which would cause its competitors to Observe, Orient, Decide, and Act. Boyd named this OODA Loop infiltration. They couldn't gain the initiative by constantly reacting to Apple.

Microsoft and Dell were titans back then, but it's hard to recall. Apple went from near bankruptcy to crushing its competition via Schwerpunkt.

Rather than a destination, it is a journey

Trying to win everywhere is a strategic blunder. Win significant fights, not trivial skirmishes. Identifying a focal point to direct resources and efforts is the essence of Schwerpunkt.

When Steve Jobs returned to Apple, PC firms were competing, but he focused on digital music players, and the iPod made Apple a player. He launched the iPhone when his competitors were still reacting. When Steve Jobs said, "One more thing," at the end of a product presentation, he had a new focus.

Schwerpunkt isn't static; it's dynamic. Jobs' ability to observe, refocus, and modify the competitive backdrop allowed Apple to innovate consistently. His strategy was tailored to Apple's capabilities, customers, and ecosystem. Microsoft or Dell, better suited for the enterprise sector, couldn't succeed with a comparable approach.

There is no optimal strategy, only ones suited to a given environment, when relative strength might be used against relative weakness. Discovering the center of gravity where you can break through is more of a journey than a destination; it will become evident after you reach.

Learn or earn

In 2020, I started software engineering. My base wage has progressed as follows:

Amazon (2020): $112,000

Microsoft (2021): $123,000

Google (2022): $169,000

I didn't major in math, but those jumps appear more than a 7% wage increase. Here's a deeper look at the three.

The Three Categories of Compensation

Most software engineering compensation packages at IT organizations follow this format.

Minimum Salary

Base salary is pre-tax income. Most organizations give a base pay. This is paid biweekly, twice monthly, or monthly.

Recruiting Bonus

Sign-On incentives are one-time rewards to new hires. Companies need an incentive to switch. If you leave early, you must pay back the whole cost or a pro-rated amount.

Equity

Equity is complex and requires its own post. A company will promise to give you a certain amount of company stock but when you get it depends on your offer. 25% per year for 4 years, then it's gone.

If a company gives you $100,000 and distributes 25% every year for 4 years, expect $25,000 worth of company stock in your stock brokerage on your 1 year work anniversary.

Performance Bonus

Tech offers may include yearly performance bonuses. Depends on performance and funding. I've only seen 0-20%.

Engineers' overall compensation usually includes:

Base Salary + Sign-On + (Total Equity)/4 + Average Performance Bonus

Amazon: (TC: 150k)

Base Pay System

Amazon pays Seattle employees monthly on the first work day. I'd rather have my money sooner than later, even if it saves processing and pay statements.

The company upped its base pay cap from $160,000 to $350,000 to compete with other tech companies.

Performance Bonus

Amazon has no performance bonus, so you can work as little or as much as you like and get paid the same. Amazon is savvy to avoid promising benefits it can't deliver.

Sign-On Bonus

Amazon gives two two-year sign-up bonuses. First-year workers could receive $20,000 and second-year workers $15,000. It's probably to make up for the company's strange equity structure.

If you leave during the first year, you'll owe the entire money and a prorated amount for the second year bonus.

Equity

Most organizations prefer a 25%, 25%, 25%, 25% equity structure. Amazon takes a different approach with end-heavy equity:

• the first year, 5%

• 15% after one year.

• 20% then every six months

We thought it was constructed this way to keep staff longer.

Microsoft (TC: 185k)

Base Pay System

Microsoft paid biweekly.

Gainful Performance

My offer letter suggested a 0%-20% performance bonus. Everyone will be satisfied with a 10% raise at year's end.

But misleading press where the budget for the bonus is doubled can upset some employees because they won't earn double their expected bonus. Still barely 10% for 2022 average.

Sign-On Bonus

Microsoft's sign-on bonus is a one-time payout. The contract can require 2-year employment. You must negotiate 1 year. It's pro-rated, so that's fair.

Equity

Microsoft is one of those companies that has standard 25% equity structure. Except if you’re a new graduate.

In that case it’ll be

• 25% six months later

• 25% each year following that

New grads will acquire equity in 3.5 years, not 4. I'm guessing it's to keep new grads around longer.

Google (TC: 300k)

Base Pay Structure

Google pays biweekly.

Performance Bonus

Google's offer letter specifies a 15% bonus. It's wonderful there's no cap, but I might still get 0%. A little more than Microsoft’s 10% and a lot more than Amazon’s 0%.

Sign-On Bonus

Google gave a 1-year sign-up incentive. If the contract is only 1 year, I can move without any extra obligations.

Not as fantastic as Amazon's sign-up bonuses, but the remainder of the package might compensate.

Equity

We covered Amazon's tail-heavy compensation structure, so Google's front-heavy equity structure may surprise you.

Annual structure breakdown

• 33% Year 1

• 33% Year 2

• 22% Year 3

• 12% Year 4

The goal is to get them to Google and keep them there.

Final Thoughts

This post hopefully helped you understand the 3 firms' compensation arrangements.

There's always more to discuss, such as refreshers, 401k benefits, and business discounts, but I hope this shows a distinction between these 3 firms.

Could this happen?

Medium isn't like other social media giants. It wasn't a dot-com startup that became a multi-trillion-dollar social media firm. It launched in 2012 but didn't gain popularity until later. Now, it's one of the largest sites by web traffic, but it's still little compared to most. Most of Medium's traffic is external, but they don't run advertisements, so it's all about memberships.

Medium isn't profitable, but they don't disclose how terrible the problem is. Most of the $163 million they raised has been spent or used for acquisitions. If the money turns off, Medium can't stop paying its writers since the site dies. Writers must be paid, but they can't substantially slash payment without hurting the platform. The existing model needs scale to be viable and has a low ceiling. Facebook and other free social media platforms are struggling to retain users. Here, you must pay to appreciate it, and it's bad for writers AND readers. If I had the same Medium stats on YouTube, I'd make thousands of dollars a month.

Then what? Medium has tried to monetize by offering writers a cut of new members, but that's unsustainable. People-based growth is limited. Imagine recruiting non-Facebook users and getting them to pay to join. Some may, but I'd rather write.

Alternatives:

• Donation buttons

• Tiered subscriptions ($5, $10, $25, etc.)

• Expanding content

and these may be short-term fixes, but they're not as profitable as allowing ads. Advertisements can pay several dollars per click and cents every view. If you get 40,000 views a month like me, that's several thousand instead of a few hundred. Also, Medium would have enough money to split ad revenue with writers, who would make more. I'm among the top 6% of Medium writers. Only 6% of Medium writers make more than $100, and I made $500 with 35,000 views last month. Compared to YouTube, the top 1% of Medium authors make a lot. Mr. Beast and PewDiePie make MILLIONS a month, yet top Medium writers make tens of thousands. Sure, paying 3 or 4 people a few grand, or perhaps tens of thousands, will keep them around. What if great authors leveraged their following to go huge on YouTube and abandoned Medium? If people use Medium to get successful on other platforms, Medium will be continuously cycling through authors and paying them to stay.

Ads might make writing on Medium more profitable than making videos on YouTube because they could preserve the present freemium model and pay users based on internal views. The $5 might be ad-free.

Consider: Would you accept Medium ads? A $5 ad-free version + pay-as-you-go, etc. What are your thoughts on this?

Original post available here

Cryptoshit. This thing is crazy to buy.

Charlie Munger is revered and powerful in finance.

Munger, vice chairman of Berkshire Hathaway, is noted for his wit, no-nonsense attitude to investment, and ability to spot promising firms and markets.

Munger's crypto views have upset some despite his reputation as a straight shooter.

“There’s only one correct answer for intelligent people, just totally avoid all the people that are promoting it.” — Charlie Munger

The Munger Interview on CNBC (4:48 secs)

This Monday, CNBC co-anchor Rebecca Quick interviewed Munger and brought up his 2007 statement, "I'm not allowed to have an opinion on this subject until I can present the arguments against my viewpoint better than the folks who are supporting it."

Great investing and life advice!

If you can't explain the opposing reasons, you're not informed enough to have an opinion.

In today's world, it's important to grasp both sides of a debate before supporting one.

Rebecca inquired:

Does your Wall Street Journal article on banning cryptocurrency apply? If so, would you like to present the counterarguments?

Mungers reply:

I don't see any viable counterarguments. I think my opponents are idiots, hence there is no sensible argument against my position.

Consider his words.

Do you believe Munger has studied both sides?

He said, "I assume my opponents are idiots, thus there is no sensible argument against my position."

This is worrisome, especially from a guy who once encouraged studying both sides before forming an opinion.

Munger said:

National currencies have benefitted humanity more than almost anything else.

Hang on, I think we located the perpetrator.

Munger thinks crypto will replace currencies.

False.

I doubt he studied cryptocurrencies because the name is deceptive.

He misread a headline as a Dollar destroyer.

Cryptocurrencies are speculations.

Like Tesla, Amazon, Apple, Google, Microsoft, etc.

Crypto won't replace dollars.

In the interview with CNBC, Munger continued:

“I’m not proud of my country for allowing this crap, what I call the cryptoshit. It’s worthless, it’s no good, it’s crazy, it’ll do nothing but harm, it’s anti-social to allow it.” — Charlie Munger

Not entirely inaccurate.

Daily cryptos are established solely to pump and dump regular investors.

Let's get into Munger's crypto aversion.

Rat poison is bitcoin.

Munger famously dubbed Bitcoin rat poison and a speculative bubble that would implode.

Partially.

But the bubble broke. Since 2021, the market has fallen.

Scam currencies and NFTs are being eliminated, which I like.

Whoa.

Why does Munger doubt crypto?

Mungers thinks cryptocurrencies has no intrinsic value.

He worries about crypto fraud and money laundering.

Both are valid issues.

Yet grouping crypto is intellectually dishonest.

Ethereum, Bitcoin, Solana, Chainlink, Flow, and Dogecoin have different purposes and values (not saying they’re all good investments).

Fraudsters who hurt innocents will be punished.

Therefore, complaining is useless.

Why not stop it? Repair rather than complain.

Regrettably, individuals today don't offer solutions.

Blind Areas for Mungers

As with everyone, Mungers' bitcoin views may be impacted by his biases and experiences.

OK.

But Munger has always advocated classic value investing and may be wary of investing in an asset outside his expertise.

Mungers' banking and insurance investments may influence his bitcoin views.

Could a coworker or acquaintance have told him crypto is bad and goes against traditional finance?

Right?

Takeaways

Do you respect Charlie Mungers?

Yes and no, like any investor or individual.

To understand Mungers' bitcoin beliefs, you must be critical.

Mungers is a successful investor, but his views about bitcoin should be considered alongside other viewpoints.

Munger’s success as an investor has made him an influencer in the space.

Influence gives power.

He controls people's thoughts.

Munger's ok. He will always be heard.

I'll do so cautiously.

People don’t believe in influencers anymore; they need people like you.

Social media influencers have dominated for years. We've seen videos, images, and articles of *famous* individuals unwrapping, reviewing, and endorsing things.

This industry generates billions. This year, marketers spent $2.23 billion on Instagram, $1 million on Youtube, and $775 million on Tiktok. This marketing has helped start certain companies.

Influencers are dying, so ordinary people like us may take over this billion-dollar sector. Why?

Why influencers are perishing

Most influencers lie to their fans, especially on Instagram. Influencers' first purpose was to make their lives so flawless that others would want to buy their stuff.

In 2015, an Australian influencer with 600,000 followers went viral for revealing all her photos and everything she did to seem great before deleting her account.

“I dramatically edited the pictures, I manipulated the environements, and made my life look perfect in social media… I remember I obsessively checked the like count for a full week since uploading it, a selfie that now has close to 2,500 likes. It got 5 likes. This was when I was so hungry for social media validation … This was the reason why I quit social media: for me, personally, it consumed me. I wasn’t living in a 3D world.”

Influencers then lost credibility.

Influencers seem to live in a bubble, separate from us. Thanks to self-popularity love's and constant awareness campaigns, people find these people ridiculous.

Influencers are praised more for showing themselves as natural and common than for showing luxuries and lies.

Little by little, they are dying, making room for a new group to take advantage of this multi-million dollar business, which gives us (ordinary people) a big opportunity to grow on any content creation platform we want.

Why this is your chance to develop on any platform for creating content

In 2021, I wrote “Not everyone who talks about money is a Financial Advisor, be careful of who you take advice from,”. In it, I warned that not everyone with a large following is a reputable source of financial advice.

Other writers hated this post and said I was wrong.

People don't want Jeff Bezos or Elon Musk's counsel, they said. They prefer to hear about their neighbor's restroom problems or his closest friend's terrible business.

Real advice from regular folks.

And I found this was true when I returned to my independent YouTube channel and had more than 1000 followers after having abandoned it with fewer than 30 videos in 2021 since there were already many personal finance and travel channels and I thought mine wasn't special.

People appreciated my videos because I was a 20-something girl trying to make money online, and they believed my advice more than that of influencers with thousands of followers.

I think today is the greatest time to grow on any platform as an ordinary person. Normal individuals give honest recommendations about what works for them and look easier to make because they have the same options as us.

Nobody cares how a millionaire acquired a Lamborghini unless it's entertaining. Education works now. Real counsel from average people is replicable.

Many individuals don't appreciate how false influencers seem (unreal bodies and excessive surgery and retouching) since it makes them feel uneasy.

That's why body-positive advertisements have been so effective, but they've lost ground in places like Tiktok, where the audience wants more content from everyday people than influencers living amazing lives. More people will relate to your content if you appear genuine.

Last thoughts

Influencers are dwindling. People want more real people to give real advice and demonstrate an ordinary life.

People will enjoy anything you tell about your daily life as long as you provide value, and you can build a following rapidly if you're honest.

This is a millionaire industry that is getting more expensive and will go with what works, so stand out immediately.