TechExec 1: Monopsony, Ikigai, and Exclusive Features!

(Total read time: 4 minutes)

Hey there,

Welcome to the 1st edition of TechExec - the newsletter that turbocharges your growth to become a Tech Executive!

Before we begin, here is a word from today’s sponsor …

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Now to the main content …

As promised, here are this week’s BLTs:

💼 B - a Business concept/theory/story

💝 L - a lifestyle advice

🤖 T - a Tech explainer

💼 B - Monopsony

Everyone knows about Monopoly! But have you ever heard of Monopsony?

When we talk about monopoly, it’s when a single company or entity dominates an entire market. Monopsony is when a single buyer dominates the market and can set wages or prices lower than the equilibrium level. Some examples are below:

👉Consider a small town with only one employer – a factory. All of the workers in the town rely on this factory for their income, so they’re willing to accept lower wages as they don’t want to leave and move elsewhere for work.

👉How about a sports team that’s trying to sign players to their team. They know that all available talent will come to them, so they don’t necessarily have to offer top dollar for their services; the players may still take it as it might be their only option.

👉 How about an example in commodity markets? Large supermarkets (think Walmart) can bargain with suppliers over prices and threaten to take their business elsewhere if they don’t comply. In other words, if you’re a small supplier in this giant buying market, you’re pretty much at their mercy if they choose to dictate what you’ll be paid for your goods or services!

💝 L - Ikigai

Ikigai is an ancient Japanese concept that translates to "a reason for being" or "a reason to wake up each morning." It's a combination of what you love, what you're good at, what the world needs, and what you can be paid for. Discovering your ikigai can help you find true fulfillment and purpose in life. Here are some steps to find your Ikigai:

✍️ List down your passions and hobbies.

🔍Discover your strengths and talents.

🌐Identify the needs of the world and how you can contribute.

✳️Determine the potential career paths that align with your Ikigai.

🤖 T - Exclusive Features

Some product features are intentionally scarce, like Spotify’s Top Fans notifications. Essentially, Spotify lets you know whenever you are in the top few percent of an artist’s worldwide fans. A lot of my friends go gaga about it (not just Lady Gaga fans - sorry for the dad joke there). Clearly, product features like these have the potential to increase engagement, yet they can only be made available to a very select sub-segment of power users.

How do products decide the level of exclusivity? Like most things in the world, there has to be a balance. Consider a product feature that is accessible to extremely few, so that even if they talk about it in their friend circle, no one would get it. Since the feature is almost unknown, virality doesn’t exist. On the other hand, as the exclusivity fades away, the value per user drops sharply. But there is a sweet spot that products strive for.

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Thanks for reading.

Until next time!

Gaurav