Helping other people make money
Exploring how a simple concept makes it easier to think about business models and how to make money.
In Ali Abdaal’s video on How to Get Rich on Easy Mode he explore a really simple concept of the Easy mode for making money, which is basically “find a way to help other people make money.”
In the video, Hard mode is described at B2C, trying to convince a customer who might be stuggling with rent, student loans, etc to buy your product. They might have lots of financial anxiety and need to choose between your product and paying rent.
While Easy mode is described as B2B, which is selling your product to businesses, but phrased as helping someone else make money. If you think about it this way, it makes much more sense. You are not just creating business software and selling to business customers. You are in fact, trying to help someone else save money, or help someone else optimize how they make money, or increase the improve their business model.
If you think about companies in this way it makes a lot of sense:
- Airbnb, helps people make money by renting their rooms
- Meta and Google, helps people make money by advertising their services
- AWS, helps people host websites and sell products
Consumer businesses however struggle every time they raise their prices… and that’s when we have to decide if we’re going to keep our Netflix subscription because they increased their monthly subscription by $3.
If Airbnb or AWS found another way to help us make money, we would be glad to pay them $3 more or $3000 more if the output resulted in more revenue or savings.
When we think of money, we can also think of it as a stream or river, we have “banks” on the river which help control the flow of the river. We have income “streams” from the river and we have “currency” or “cash flow” of money which is like the currents and flows in it’s movement.
Some people are able to create many revenue “streams” and increase the amount of money they have, and some people have a lot of “liquid assets” which is something that can easily be converted back into the river of money… but a few rare people find a way to step into the middle of the river, and instead of trying to get money out, they start helping the river flow towards others. They splash the river and more water flows into your revenue stream… they are directing the current and flow of water towards others.
That always seemed like an interesting idea to me, that the goal is not to just make money but to find ways to improve the lives of other people, and that service or act of helping is what brings you reward. However, if we pair that philosophy with the concept in this video, it seems to click together. The ultimate goal is to create a business that helps people make money… whether you are standing in the river and splashing it to others, or finding other ways to increase the flow of water, by standing in the middle and directing that flow, you are able to benefit from it yourself.
The people getting rich are the ones helping other people get rich. – Ali Abdaal
When thinking of startup ideas, it makes it a lot simpler to reason about the business model. Instead of asking, “where will I find my first customer?” or “how will I sell this product?” you need to be asking rather “how can I help other people make money?” If the startup idea doesn’t pass that basic test then it might not be worth rethinking the plan.