The illusion of Choice and the opportunity it presents

You can have any colour as long as it is black!! - Henry Ford

Founders often get confused on misled when they hear about too many choices available to consumers and they have to up their ante or statements like “we live in an era of choices”, “this has been done before” or “you are in a crowded market”. Statements like these are only partially true.

As an entrepreneur, you ought to look at this confusion as an opportunity to create a monopoly in existing markets. If markets exist then you only have to worry about penetrating them. If they don’t you have to create them first. Hence sometimes being in a crowded market can be a good thing.

The true answer to the question of - if there are too many choices is “ it depends”.

Societies have evolved from hunter-gatherer to agrarian, to industrial, to information, to hyper information and now to the era of instant transactions and gratifications. There seem to be more of everything or we are made to feel that way.

There is plentiful out there when it comes to consumer choices; as there is more and more of everything.

We must however look that those choices - are they real or illusionary?

There apprears to be infinite choices, however, consumers are only exposed to a small palette of choices that too, usually well monopolised.

Unicorns and dragons¹ do not care about existing choices, they care about creating outstanding opportunities by exploiting their own uniqueness, their own perspectives, new business models, market timing, differentiation and creating a moat among many other things.

Creating and playing in niche: There are many phones, but when we go out to buy one there are only a couple of firms to choose from. You won’t queue up to buy a Nokia or Blackberry anymore. Say you buy an Apple iPhone, you will again have limited choices on how you fulfil transactions. You have tons of apps to choose from but only what others are selling on the platform and what Apple allows to be sold in its marketplace. If you narrow down your needs, only a handful of apps will meet your needs. Being in the category of one, simply makes one a taker of what is offered. Sometimes it may be what you need, often it is what they tell you that you need. Thus playing in a niche is a super advantage for any entrepreneur.

Not the total number of , but number of matched options drive business: We think we have infinite movies to watch, but production and commercial constraints and despite a long tail of inventory only a palette of choices suit our interests. Switching between streaming service providers and hunting for something to watch often takes more time than watching the program itself. Matching needs to a category of 1, is a key game changer for entrepreneurs.

Understand timing, commercial constraints - yours and theirs: There are a large number of producers but commercial constraints will make only a few survive the test of time. There is always a risk of locking yourself in the losing proposition as you may be investing a software about to go defunct or using tech tools for which it is hard to find experts. COBOL used to be popular - once upon a time. Time and market shifts and the emerging need for web3 development have made Solidity popular.

Everyone wants to buy dreams, and pay handsomely for them: Among us are some who lurk with and sell the idea that we can become whoever we want. Without realising that this is dictated and constrained by circumstances we are exposed to from schooling to professional life, finding partners and choosing schools for kids. Independent thinking is a subject that is taught or looked up on google. Seeking someone who can break the spell of indoctrination is also indoctrination but in reverse. Hence this lure, a story, a dream becomes a sell.

Market Asymmetries lead to opportunities of arbitrage: We now have the opportunity to reach out to anyone. We can now reach anyone via email or phone but we have more gatekeepers and spam filters protecting us. I personally know people that know US president, Elon Musk however my ability to influence their opinion still remains negligible. Market asymmetry is an opportunity that was exploited by LinkedIn to reduce the degree of separation. Though arbitrage of influence and impact still remains to be fully capitalised. Layers of obfuscation of information are needed as we want to stay private. More access has led to more moats. As we create more tools to offer services to people, more tools are needed to take advantage of asymmetries. We are constantly creating asymmetries of information, price, functionality, languages, context and so on. It has given opportunities to create tools like Zapier to reduce asymmetries.

Influencing as a busienss: The policy decisions of governments, and the structure of governments have stayed the same. Irrespective of the country or organisation, the decisions are often made by a handful of people. This leads to opportunities and platforms that can be exploited to influence decision-makers as they look for solutions to problems.

Using fulfilment as a driver for contribution: As there is the growth of knowledge and the subjects we can study, there is a lack of fulfilment as there is misalignment on how we can productively utilise the knowledge. New contexts, networks, and opportunities can be created for those who want to contribute.

Opportuities in information validation: You can’t trust all the information you come across as it may be based on commercial agendas. If you look at 1965 advertisements, they suggested sugar is good for you. This leads to opportunities to create authenticity in the information shared.

There is so-called free access to information but there is also information behind paywalls, in select courses or books. It is hard to find what is contextually relevant or regurgitated secondary information. This creates acceptance in selling information at micro levels - blogging, microblogging, videos etc.

Know Thy Target Market: Joshua Bell one of the finest violin 🎻 players went busking in a subway, and no one really noticed. He made only $52.17 in 43 minutes. If his violin playing made the opportunity for him he would have made a lot of money. None of the fine virtues is worth it if you don’t pick the right environment or the right environment picks you. This is a challenge and you’ll need the right forum and networks that propel you as an entrepreneur. Try not to sell ice to Eskimos. It is time to question the paradigms and not regurgitate if you have been made to believe that to be true. Do not assume dignity and trust but dont pick the wrong environment to earn it.

Support Network: Nicola Tesla was forced out of the venture and for a time had to work as a manual labourer in order to survive. In 1887 when he gained public interest in his AC electrical system and funding for his new Tesla Electric Company only then his circumstances changed. There are many super-talented people all around us living suboptimal lives. Our support network plays a big role in the choices we are allowed to make. To leverage one’s intellect to its full potential you have to constantly be around those who will know and value your talents. Don’t second guess and spend a moment around those who will not value you. Picking the right team and environment can make or break you and if it is not working for you it may be time to rethink your strategy.

Leverage Chase and Envy: Once you understand to differentiate the fabrication of options that go around us only then you will realise that though there appears to be ample choice, illusions created around us are made to believe so. In an aircraft when you walk through first, business, premium economy to economy class, it focuses on the choices instead of selling what we actually need. We can exploit the chase as the consumer loves the lure. As Charlie Munger puts it that in the 21st century the governing emotion is neither fear nor greed. It is envy. You don’t have to worry about recessions if you are selling products that cause envy.

Directing customers to choose: A watermelon vendor had the prices listed on his board - three for ten dollars and one each for three dollars. A professional hopped off his car bought a watermelon for three dollars then a second later bought another watermelon and paid him another three dollars and a few seconds later bought another watermelon and paid him three dollars and left the shop thinking he was very smart. A bystander told the vendor that vendor has made a mistake in his pricing. The vendor smiled and said did you notice I managed to sell three instead of one.

In this era, the challenge of mismatching remains escalated by noise and ambiguity. This presents one of the greatest opportunities for the current generation of free thinkers, entrepreneurs and game changers

© Sameer Babbar

sbabbar@sameerbabbar.com

1. a unicorn is a privately held startup company valued at over US$1 billion. A dragon is a company that returns an entire fund.