Hacking Your Situation

I had a really interesting conversation with a software developer from Uganda this morning. We came in contact through a mutual friend in Dubai and the next thing you know we were chatting away via teleconference (the internet is an incredible thing). At the beginning of the conversation, he was discouraged and unsure about the future of his career. He spoke fluent English and had serious coding chops but didn’t feel he could make enough money in the local economy or compete in the global market of software engineers. By the end of our talk, a radical change in perspective had occurred.

Rather than counting himself among the pool of local low-cost engineers, he shifted to see them as his resource. He had already proven that he could build MVP products and win clients to those products. The only link left was to direct those achievable streams of income into scaling those products using the very local, low-cost engineering resources he was afraid to be counted among. I was as amazed as him by the end of our talk. No facts had changed but a completely different perspective had been achieved. Inefficiencies were identified about his circumstance that could then be taken advantage of instead of lamented. A few things come to my mind when the above scenario played out. The first was arbitrage.

“…an arbitrage opportunity is present when there is the possibility to instantaneously buy something for a low price and sell it for a higher price.” - Wiki

All entrepreneurship can be boiled down to this. Take something of lower value and moving it into a context of higher value. The real challenge is in identifying those arbitrage opportunities. The second thing that came to my mind was the Stirling engine. A Stirling engine is an engine, driven by differences in temperature. By virtue of its makeup, simply placing a Stirling engine on a heat source will cause the motor to run.

“..the stirling engine uses the temperature difference between its hot end and cold end to…converting thermal energy into mechanical energy. The greater the temperature difference between the hot and cold sources, the greater the thermal efficiency..” - Wiki

This thermal inefficiency or disequilibrium is captured and taken advantage of to perform work. You could almost say that the Stirling engine is doing arbitrage on thermodynamics to run its self.

The last thing to come to my mind was the book David and Goliath by Malcolm Gladwell. In this book, Gladwell examines notably historical people who had, what seemed to be, disadvantages but who then turned those perceived disadvantages into strengths. The book was highly criticized and many claimed what it was saying was too obvious to be of interest. I think such criticism misses the point. The profound idea is this. What if everyone’s perceived disadvantages are, in fact, unique opportunities to become people we could not otherwise be?

There is no free lunch and, like engineering, there are tradeoffs to every situation. The same is true of one’s personal makeup, history, knowledge, and situation. The trick is this: Identify the unique arbitrage opportunities present in your exact situation and, like a Stirling engine, use them to your advantage being confident that they are there. The only question is whether you are seeing them. Ask yourself these questions: What unique resource do I have an abundance of right now? To whom or in what context would this resource be of greater value? Lasting, ask yourself: What can be done to capitalize on this disequilibrium?