Hello beautiful readers 👋
It’s time for your injection 🧠
Let’s get straight into this week’s article…
Wanna get FILTHY rich like a hippopotamus?
Forget hard work. It's all about physics.
Wanna get filthy rich?
Of course you do, you dirty capitalist.
But to get rich you have to work hard.
Like those Indian cart-pullers who earn 50p for a full day of long, hard manual labour.
Or those industrious sweatshop workers on 3p/hour in Sri Lanka.
On the rise to become the Bezos of Bangladesh…
Ah, wait. Yeah, OK.
That’s all bullsh*t.
You aren’t paid for how hard you work. It’s one factor, but a small one. You aren’t paid for how much “value” you add. Another factor, but a small one.
You’re paid for your location.
More specifically, your proximity to money.
Money isn’t efficiently distributed by free markets. It obeys the same laws as gravity…
The Gravitational Theory of Money
m = how much money you have
M = how much money there is in your market
r = your distance from the source of money in your market
(G = proportionality constant, you can ignore)
In other words, your “force of earning” is proportional to how much money you have now, how much money there is in your industry, but inversely proportional to your distance from the source of money in your market.
Why are sweatshop workers paid so little? They’re in a boomingly profitable market: fashion.
But they are very, very far away from the source of the money, hence their 3p/hour.
But as you get closer, not geographically but metaphorically, the monies start to stack up.
Instead of making the clothes, what if you’re a Junior Designer, designing the clothes? Much closer to the source of money: the big fashion brands at the epicentre of the market. Already you jump up to £15.38/hour!
Senior designer at Nike? Now you’re at $100,000.
CEO at Nike? Now you’re at £28,000,000+ in yearly compensation.
Founder of Nike? Billionaire.
When I was 16 and first started tutoring, I helped kids in my local area, charging £5/hour.
When I moved markets to wealthy international students, my rates shot up to £100+/hour.
And when I moved once again to wealthy international students studying tough university courses, my rates went up once more to £195-£500/hour.
(Once £1000/hour!)
Gloria Richards, babysitter to the children of billionaires, earns $2000/day as a babysitter.
Flight attendants at Delta airways start on $33,000. Flight attendants on Netflix’s private jet are on $385,000.
The irony here is these better-paid jobs aren’t just paid, they’re also much easier.
Rich People Don’t Care
When I was £5/hour, hustling around South London as a private tutor, I was interrogated by parents, had to negotiate every £, and go out of my way in between lessons to “add more value” with homework and marking.
In the international student market, no one gave even the tiniest f*ck. No haggling, no out-of-lesson demands, no Asian parents nagging me at lunchtime to rant about how their son still. isn’t. a. doctor!
But of course, we’re just scratching the surface.
Selling to markets full of rich people is great - personal training, therapy, interior design, all ace ideas.
But if you really wanted to take advantage of the Gravitational Theory of Money, you want the highest M possible (wealthiest market) and lowest r (distance from the source of the money).
A reminder:
m = how much money you have
M = how much money there is in your market
r = distance from the source of money in your market
And this is where B2B business models blow any other get-rich-quick nonsense out of the water.
B2B = business to business
Instead of selling to a normal person, your customer is now a big, filthy, disgusting, soulless corporation, who make so much money, their fat cheeks have squished their eyelids together, blurring their vision to a point where they can’t tell the difference between £100, £100,000 and £100,000,000.
Fun fact: Google shuts down any of their ventures making less than £100m/year in revenue!
Funner fact: they have so much money, a bloke scammed Google by sending them fake invoices for £100m in total. When you’re swimming in money, you scarcely have time to notice a petty 9-figure theft. Google make ~$2m/hour after all!
All you have to do is get your foot in the door at one of these swelling, cash-rich hippopotami and then go for the jugular.
Whatever price you would normally charge, double it, add a zero. If they fight back, you can negotiate it down, if not, then you just won the lottery!
When I first started “business”, I was obsessed with helping people.
(How stupid and naive!)
The trouble is the people who need help don’t have any money, otherwise they wouldn’t need your help.
So building a business model to help people is silly (not always, but sometimes).
A different (perhaps, better) approach is to start a business to not help people, but to extort money from giant, obese, jiggly hippopotami like banks, universities, and corporates, and then use that money to subsidise truly altruistic ventures within your organisation or on the side.
For example, when we started Afinity, it was all about helping poor kids get into university.
We started by charging regular students a tiny fee to have their personal statement reviewed, and gave away free reviews to disadvantaged kids, and 100s of articles and videos out, all for free. Free free free.
A nice, cheery business model.
But we failed at both ends: we were never gonna get rich selling to jobless students, nor were we ever gonna have the capital to really help the disadvantaged kids we cared about so much.
So we pivoted.
Instead of £10 for a statement review to a student, we charged schools £10,000 for statement reviews for all their students.
We moved from B2C (business-to-consumer) to B2B (business-to-business).
But schools are also broke, relatively, in the grander scheme of things.
But if you move up the food chain again, to universities…
Now things get really interesting: universities spend £500m/year on advertising in the UK alone!
And once again to the university student accommodation industry: oof, well now we’re looking at a tasty £4bn/year.
And the markets just keep getting bigger…
There are already 334 Fintech unicorns because the finance market is just so f*cking expansively massively overflowingly drowning in Dead Presidents.
All a Fintech has to do is optimise some payment process by a cheeky 0.001%, but 0.001% in a $25 trillion market is a one-way ticket on a private jet to a luxury yacht parked inside a mega-mansion.
Summary
So, look, if you’re sick of your job, or you love your job but you’re not getting paid enough, or you love your job and you are getting paid enough but you’re a dirty capitalist and you wanna get filthy rich…
Go hunting for a nice, fat hippo.
Find a skill/service/product you can sell it.
And then go for the jugular - charge as much as you can, make your $$$, and then get on with doing lovely things for the world, unconstrained by finances.
We’ll get into the nuts and bolts of this next time.
And if you’re interested in joining the coaching cohort I’m working with, helping people escape a job they hate to earn £100+/hour as an in-demand freelancer, you can still apply!
Just reply to my newsletter with why you’re interested + all the obstacles you think will get in your way over the next 6 months.
I’ll be reviewing all applications this Sunday but amazing responses so far - from an astronaut conference organiser to aspiring mental health entrepreneur!
Ask Me Anything 👋
What are your struggles/goals? What’s holding you back? Any questions - let me know and I’ll answer personally.
Andrew ✌️