What insight can be drawn from the four quadrant value universe? Can it help creative professionals understand how to earn a living while pursuing their passions?
A couple weeks ago I attempted to explore modes of navigating the four economies. That post was largely unsuccessful and a few exchanges with Stefan King in the comments demonstrated the confusion inherent in any analysis of transitions between quadrants. It turned out that asking, “How do I convert?” was the wrong approach.
I eventually realized I was not discussing conversion strategies but instead the social signals that indicate quadrant boundaries. For example, you know you have moved from the attention economy into transactional economy when information begins arriving in the form of a physical product. The transfer of physical product is nearly always an indication that monetary payment will be required.
Does it follow then that refining your attention economy work into a physical product will facilitate monetization?
Not necessarily. The physical product serves as an indicator of refinement and refined goods are generally transacted.
But, what if the people you engage in the attention economy do not want a refined product?
What if you have begun to form relationships with some of them?
Writing a book will not help you push them back towards the unrelated side of the plane. Some may accept the purchase as a form of gift exchange, but that will not provide a sustainable source of income.
How then are we to move from one quadrant to another?
The four quadrant framework does not offer much practical value if we remain trapped in a given quadrant. Counter-intuitively, as the boundaries between quadrants blur and as the gaps between are bridged, it becomes more important to manage these subtle transitions carefully. Options abound but many won’t leave you feeling very good about yourself…
The Old Way
The old answer was to organize certain activities into companies.
What is a company?
The terms ‘company‘ (corporation) or ‘business’ are arbitrary distinctions. Recall the famous quote by Peter Drucker:
A business exists to create customers.
In the industrial economy this statement became tautological. A business was something that created customers, therefore if something created customers it was a business. Tax laws and regulatory policy reinforced the tautology. A corporation was a particular legal construct designed for money making ventures. Any venture that produced revenue was strongly nudged into the corporate silo.
The result was a bifurcated society. Productive activity became synonymous with commercial activity, and a distinct set of institutions existed to encapsulate nearly all forms of commercial activity. Activity that was not intended to be monetized existed exclusively outside the corporate institutions. The two mixed only fleetingly. The mainstream goal was to achieve work/life balance…not work/life synergy, or even more simply, a productive life.
The Institutional Machine
Businesses, being institutions organized around a single goal, became bureaucratized machines. The larger the business the more refined the machine. Machines need fuel, the more refined the machine the more refined the fuel. That fuel is money.
Individuals within a business are obviously capable of appreciating diverse streams of value, but diverse streams are unreliable and often inconsistent. A highly refined machine cannot run on bits of attention here, a few relationships there, and a dash of intrinsic motivation. You wouldn’t expect a Ferrari to run on one gallon of diesel, one gallon of jet fuel, and a few quarts of canola oil. The need for consistent and reliable fuel necessitated conversion into a single refined medium (money) wherever possible.
While critics contend that this mode of organization it dehumanizing, advocates counter that the capitalist model was most effective at motivating the productive activity necessary to alleviate scarcity of material goods. [I agree with both perspectives.]
Breaking Down Barriers
As technology has broken down work/life divisions, productive activity has leaked out of the corporate silos. It has become clear that extrinsic reward is not always the best way to motivate productive activity. Web platforms have empowered intrinsically motivated individuals to produce and share massive volumes of unmonetized cognitive surplus.
In some cases this activity is purely motivated by intrinsic interest. In other cases it may be motivated by exchanges of non-monetary values. Either case provides clear evidence that monetary compensation no longer has a monopoly on motivating productive activity.
This returns us to the original question:
How can creative professionals earn a living if they are simultaneously rewarded in other quadrants?
How do you earn money if, for example, your audience is already compensating you via attention and relationship?
The Wrong Way – Reinforcing Boundaries
The wrong strategy can be seen most clearly in the attention economy. It is in the attention quadrant that attempted monetary conversion is most obvious. For example, I recently came across the following on a popular blog:
An Unfortunate Lie: This lie states that if you help enough people, and give away enough value, sooner or later you’ll make money.
If you don’t get your offer right from the very beginning, any amount of value you give away will amount to naught. You simply must get this right, from the start.
Though I often find the author of this passage to be intelligent and thoughtful, on this issue he is thoroughly misguided. He is falling into the same tautology used to define the industrial corporation, paraphrased:
If a blog generates income then it is a business, and the purpose of a business is to earn income. Therefore the primary focus of your blog should be income generation.
The difference between a blog and the highly refined corporate machine is that the industrial corporation must organize around money or descend into chaos. The individual creative professional is not a refined machine. He is capable of accepting and appreciating value in multiple forms. The implication that creative professionals should focus on money first and foremost is purely arbitrary.
A blog that earns income exists partially in the monetary economy and partially in the attention economy. That is the reality. The conclusion – if you don’t set the stage properly for monetization “any amount of value you give away will amount to naught” – is both factually incorrect and ungrateful.
Artificial boundaries do not spring into existence via assertion. The reality is that not everyone is a buyer. Forcing a transactional relationship onto people who prefer operating in other quadrants is a fool’s errand. It might lead to some sales in the short run but in the long run it will cannibalize your base.
As Seb Paquet likes to say: “Friends don’t monetize friends.”
Your closest collaborators are generally not your biggest promoters. Likewise, your biggest promoters often are not buyers. Each has found his or her individual comfort zone. They do not want to be converted. A rational strategy must acknowledge this reality and accept that each form of exchange conveys value.
The Right Way – Utilizing Scarcity
Scarcity is the one condition that allows you to move anywhere in the value universe you want.
Because scarcity isn’t trickery. It is reality. When you have something that someone else wants all the leverage is in your hands. That person might prefer a collaboration or an attention exchange. The services in question might even be unsuitable for transactional exchange (unrefined). It doesn’t matter. When you control something scarce you can direct activity wherever you want.
Suppose you email me asking for my unrefined opinion on some abstract and impractical topic. Normally this would be a difficult interaction to negotiate in transactional terms. What is the monetary value of my off-the-cuff response to some random impractical question? We might even have a pre-existing relationship, making a monetary transaction even more inappropriate.
Now suppose I am occupied with several other projects. I am working twelve hour days and my free time is extremely limited. I try referring you to someone else but you insist that you want my opinion. Eventually I am forced to reply:
I would love to help but I am currently committed to several other projects and simply can’t spare the time right now. The best I can offer you is an appointment at my current hourly rate…that is, only if you desperately need to get in my calendar.
Am I (hypothetically) being sleazy? Assuming I am being honest…of course not! The statement above is not an active attempt at conversion. It is a passive statement of reality. There is no manipulation occurring. I am not creating artificial scarcity. My time is, as a fact of reality, limited…and therefore valuable.
Honest Supply & Demand
At the most basic level, scarcity is a relationship between supply and demand. When supply exceeds demand your leverage in an exchange decreases. When demand exceeds supply your leverage in an exchange increases. The ability to monetize unrefined values or related-party exchanges exists when demand for either exceeds the supply.
There are countless strategies promulgated to create this confluence of circumstances. Many are ethically questionable because they rely on either artificially increasing demand or artificially decreasing supply. The degree to which each can be questioned ethically is a direct function of the degree to which a given market adjustment is created artificially. Using false advertising to generate demand can be easily condemned. Restricting access to a digital product in order to recover the fixed costs of production…more justifiable.
However, there are a few strategies that capitalize on scarcity without any ethical compromise. You should not be surprised that they directly contradict the “business = money = business” tautology.
Work Your Ideal Zone
Are you an executor or a dreamer?
Do you prefer starting projects or finishing them?
Do you operate best within close relationships or in the anonymous marketplace?
We will all find ourselves more comfortable operating in some quadrants than others. I tend to value unrefined ideas over refined products and therefore am most comfortable in the lower half of the plane. Wherever your ideal zone is, that is where you will create the most value. That is where you will generate the most honest demand.
Acknowledge Multiple Value Streams
Don’t neglect non-monetary value streams…promote them. The most obvious reason – they have value! Relationships have value. Attention has value. A “business” that provides money, relationships, and attention is better than one that provides only money.
Two less obvious benefits:
- Multiple value streams provide social proof. A sterling reputation in the attention economy signals potential ability to create refined value.
- Multiple value streams make you legitimately scarce. Investing in relationships leaves the remaining time available to transactional endeavors more scarce.
Do Not Attempt Conversion
This shouldn’t require any further explanation. If you recognize that individuals converge towards certain comfort zones then you must accept that conversion is not a simple matter of changing habits. It requires pushing people out of their preferred quadrant. Most people will eventually resent that.
Allow People Opportunities to Orient Themselves to You
Make yourself available to be pulled by the right opportunities. If you succeed in creating value in your preferred zone then you will produce spillover demand in adjacent zones. Success in the attention economy generates demand for transactions and relationships. Success in the relationship economy will attract attention and gifts.
Instead of pushing people out of their preferred quadrant (conversion), pull in the people who have a preference for adjacent quadrants.
None of the above strategies is a sure thing. You still might require some artificial scarcity in order to pay the bills. Nonetheless, experimenting with the strategies above is surely preferable to self-sabotage. Most importantly, understand the scarcity you are utilizing.
photo courtesy of Gandalf’s gallery