Читать книгу Oversubscribed - Daniel Priestley - Страница 12

When it comes to the rewards you and your stakeholders will make from business, there are three ways the demand and supply relationship can be set up:

 Oversubscribed – Demand outstrips supply, resulting in profit being tolerated on top of normal wages.

 Balanced – Demand and supply are relatively even resulting in normal wages being tolerated but not profit.

 Undersubscribed – Excess supply is available above demand, resulting in losses.

It doesn't matter what the product is, where the business is based or how dedicated the team members are. The only thing that matters is the relationship between demand and supply. Even when the product stays the same, if that relationship changes, the profitability changes.

In California in the 1980s, millions of people decided that they wanted plastic surgery. The surgeons who could deliver this service were in short supply and they made vast sums of money providing breast enhancements, nose jobs and Botox. Anyone who could perform these operations ended up with a mansion, a yacht, supercars and lucrative investments. They were making millions because the market had vastly more buyers than sellers when it came to plastic surgeons. The cosmetic surgery market at that time tolerated wages and profits.

This is no longer the case nowadays. LA is filled with plastic surgeons. Attracted by the vast available wealth, a whole lot of medical students switched their major in the late 1980s and headed for Beverly Hills to make big money. But they discovered upon arriving that they weren't the only ones who had taken this path. By the end of the 1990s the demand and supply relationship returned to a balance, and today most plastic surgeons in LA make a normal surgeon's wage.

The 1980s plastic surgeons made more money than surgeons today because of a trend that happened for a niche within the medical industry. It wasn't the nature of what they were offering that made it profitable; it was the demand‐and‐supply tension that set the price.

There are cycles in whole industries whereby demand for anyone in a chosen field will be highly in demand. This is known as an industry boom, for example, the dot‐com boom in the late 1990s, whereby almost any Silicon Valley company could raise millions for little more than an idea.

There are cycles in the economy whereby demand from consumers as a whole outstrips supply from industry as a whole. In these times, everyone seems to be doing well and there's an economic boom for almost everyone, such as what happened in the era known as the Roaring Twenties.

You do not want to be at the whims of the economy or your industry trends. Your ability to earn and profit is far too important to leave to chance, and as you'll see from the principles and strategies we explore in this book, it's possible to be completely independent of your industry or the economy and build a market of your own.

It's possible to play an advanced game in which you are completely in control of the forces of demand and supply that impact on your business. This is when you can become oversubscribed on your own terms, regardless of what's happening for everyone else.

Even in saturated markets, even when competition is fierce or you are up against companies with vast resources, it is still within your power to become oversubscribed and enjoy profits on top of the normal wages of your industry by creating a market of your own.

The forces of demand and supply work the same when customers perceive you as separate from your industry. Even better, you don't need very many people in order to create your own market, become oversubscribed and to maintain a profitable price if you can get a few key things right and create your own fiercely loyal market.