Competition, rewards and barriers to entry

I am deeply involved in Eben Pagan's Guru Mastermind Programme
This guy is a hero!! - he walks you through what you need to know
Just listening to the Brad Fallon interview http://www.gurumastermind.com/CD8/teleclass/080530_replay_stompernet.asp

The guys are talking about "selling information products" - which means for the rest of us, is selling e-books at inflated prices!

Listening to this I realise:

1) Competition in any area depends on the reward, reduced by the "barrier to entry"
2) Most experts do not want to pass on their expertise because that reduces the "barrier to entry"

In other words Competition depends on Reward
Barrier to entry

"Barrier to Entry"

The "Barrier to Entry" describes how difficult it is to get started - for example "Being an World Class Boxer" has a relatively low "Barrier to Entry".

Even though a World Class Boxer demands a type of physical body, determination and years of practice, there is a relatively low "Barrier to Entry"Any young man can go to the gym and learn to be a Boxer. You do not need a smart background, you need guts and determination but no GCSEs or University degree.

The rewards are massive - Status, titles, feeling good about yourself - having a fantastic body, having a goal, status, fantastic self discipline. But because there is a low "Barrier to Entry" the competition is steep! Boxers are the most disciplined and physically well tuned men I have ever examined. It is a lot tougher to be a World Class Boxer than have a career in medicine. The low "Barrier to Entry" means worldwide a lot more guys want to be world class boxers than want to be doctors.

Doctoring has a high "Barrier to Entry"

In order to be a Doctor, you need to have a good education, a stable background, good school, good GCSEs, Excellent A'Levels, no financial worries, good study skills, stable mental health etc etc etc

There are great rewards - status and lots of money, security, interesting job - and everyone needs doctors
There is a high barrier to entry - long years of study and self discipline
The competition is not steep - how many doctors do you know? the high "Barrier to Entry" means that once people are inside the circle, it is easy to make a living.

The greater the reward, the greater the competition, limited by the "Barrier to Entry"

The Lottery is another example -

There is a great reward, - win Millions,
There is only a small barrier to entry - a pound ticket
Therefore:
There is massive competition - everyone buys a ticket


The same principle applies to selling pornography on the Internet
There are great rewards, earn Millions! - lots of people want pornography
There is a small barrier to entry - a video camera and some Internet expertise
Therefore:
There is massive competition - the Internet is swamped with pornography!

At the other end of the scale, - Professor of Assyrian Archeology

There are minimal rewards - not a lot of people want to know about Assyrian Archeology
There is a high barrier to entry - long years of study, academic intelligence
There is not a lot of competition - how many people do you know who want to be professors of Assyrian Archeology do you know?



Copyright Dr Liz Miller 2008