Let’s assume for the moment that you are not like Donald Trump – you have not inherited capital and market position. You are jmust a normal person. Let’s also assume that you do not have an incredible talent (like at a sport or other specialized activity that people pay huge sums to support). Ca n you get rich?
In the old days, the answer was “not likely”. Sure, some folks did it. But competitive advantage was so powerful (like GM in the car business pre-1960’s), it was hard to break into big value added markets. One could, on the other hand, do very well by working hard to get into “niche” markets. By niche, I mean local — like being a contractor, or a store or other stuff that local people needed.
This is changing. It is changing because digital technology is having profound effects on markets everywhere. Competitive advantage is not what it used to be (So says Rita Gunther McGrath). And work itself is less valuable as more and more of it gets automated.
This brings to the fore two factors that play huge rule sin adding value in our highly connected societies. They are (1) network effects, and (2) matchmaking.
Google search gave us our first view of how powerful network effects can be. Google succeeds because of the size of its network. So too does Amazon and Facebook. They leverage amazing network effects. But they do not exhaust network effects. To the contrary, they leave open all sorts of high value potential network growth opportunities.
Matchmaking is still in its infancy. We think of it in terms of personal matchmaking. But skills matchmaking is starting to take hold. Check out this Forbes article to get a glimpse of this. Here is the thing — every organization on the planet has a problem in matching skills and problem solving needs. For that reason, matchmaking is likely to evolve into a business model as tech gets better at guaranteeing quality and timeliness.
So, if you want to get rich these days, figure out how to generate network effects and build matchmaking competences. If you can do these two things better than other market participants, you don’t need other skill sets.