Due to the pandemic, everyone is being forced to connect with people they did not talk to frequently. The reality is that as you get older you unlikely talk to your parents every day or your uncle every day. We could go on and on with examples but the point is the same. You probably know your neighbor better than you did 1 year ago due to the forced quarantine. All of this forced us to take a step back and realize how much potential is wasted here in the USA. In addition, the good news, is that many of the naturally gifted people simply give up and fall of the radar with stories about “how they were this or that”. The second item are some clear patterns we’re seeing (looking at ads) and how to avoid blowing up next year with the wrong plans. Some things are certainly going to happen.
Part 1 – Wasted Talent: We really do not care where you’re from. You could be from an upper middle class area where people were naturally raised in a more strict environment. You may have been raised middle class where there is a lot of petty crime and low end drug dealing. You could also be in lower middle class (more drugs and maybe some gangs) or even from the absolute bottom with rampant drugs, gangs and poverty housing environments. No matter what, every single one of these neighborhoods in the USA has at least one person (probably closer to 10) that “could have been someone”. Yet, when you go back in 10 years of those 10… Maybe one makes it. This is due to a lot of issues that we’ve covered here in the past that need to be reiterated.
No Results – Time to Ignore: A lot of middle class areas do not have “bad people”. Bad people are usually in the lower to lower middle range (we’re referring to legitimate criminals and drug dealers, hard to argue these are good people). The majority of the middle class? We’d describe this as nice people with no real direction. You see a lot of them talking about eventually making six figures one day, consumption of tons of boxed foods – “a calorie is a calorie” and a focus on “moderation” since they don’t want to be pushed too hard and break something. The big issue here is that this type of thinking is passed onto every generation. The only way to break out of it is to find someone who came from the same area that made it. Talk to them and you’ll learn (FAST) that they didn’t do things the same way. They worked much longer. If they played sports they trained far and beyond what they were told to do and they took their food/diet seriously.
The other way to look at the results is by figuring out where they are now. If they made it to a four year college (an accomplishment from most areas outside of the upper middle or better) you should then ask what they are doing now. Did they make the right decisions in college to set themselves up? So on and so forth.
The theme here is that the majority is stuck in the middle, going along with mediocre results. There is no reason to be upset (with the people giving you advice). And. There is no reason to listen to them either. As we’ve said many times in the past “You don’t owe anyone anything. If you want to help people, the best way to do that is by becoming successful yourself”. Therefore, adopt a “smile, nod and agree” policy. If you are getting advice from someone who is simply a “good person and trying to help”, say thank you smile, nod and agree. You don’t need to battle their egos and get into a fight. Simply act amicable and move onto the correct tasks. (Hint it never involves “chilling or relaxing” if you’re not where you want to be yet).
Extreme Results: If you’re being called extreme you’re definitely on the right track. How else do you change your momentum into the right direction? What billionaire isn’t extreme? What professional athlete isn’t extreme? What successful company isn’t extremely competitive? Being extreme is a complement. You don’t want to be an extreme drinker or drug addict but you get the point. If you want to take whatever talent you have and maximize it, you have to push that talent to the extreme or live with guilt for the rest of your life. And. Sit around telling people how you “were” this/that in the past.
Remember. You have to drive to extreme results in something you are actually talented in. Just because you’re passionate about something doesn’t mean you’re going to be good at it. A 6’6” guy with a 40” vertical should be playing a jumping related sport like volleyball not training to be a horse jockey because he loves horses. Someone with incredible software skills shouldn’t be majoring in english/languages because he enjoys writing. He should be writing code instead. Take the talents you have (majority will be gifted in at least 1-2 things) and take them to the extreme. Eventually those two skills collide and you’re unique in your craft.
Follow the Value: The final item that seems to be lacking (when talent is wasted) is the misunderstanding of value. Just because you’re good at learning new languages doesn’t mean you can make money from it. In advanced hospitals they already have devices that can translate what they are saying into a separate native language. Lets use a random sport like water polo. We’re sure it is difficult. That said a pro water polo player is lucky to make $100K per year (we don’t know the sport well and googled it but maybe it goes up to say $200K). The point is clear. If you can get a full ride scholarship and be the #1 player at say Harvard due to your skills in Water Polo… What is the answer? The answer is that your free education is the “peak” of the return if you can get a free degree from Harvard. It is possible to make $150K+ once you graduate and you get to spend 4-years competing in a sport you are talented in. Notice, you don’t have to love it. You have to have a winners mentality and enjoy winning. Going in every day knowing that you’ve won a free education for playing a fun sport. You need to have at least one hobby that keeps you in shape anyway so you’re winning in two different ways at the same time. Stay positive.
We’ve really simplified it here but these three items alone should help filter out your contacts right now. Take a look at where you want to be and figure out if the person has it. If the answer is no then you need to find someone else. One person could be for money, one could be for fitness and one could be for any other skill/topic you want to master. No one is a jack of all trades (exceptional people are typically incredibly good at 3-5 things, which makes them unique and irreplaceable). For those that want the “answer”, the typical one that works for anyone is good sales skills, avid writer (not reading as that’s a crutch for stealing the ideas of other people) and some sort of talent that is in high demand today (coding, design, manufacturing, copywriting – just a combination of the prior two and relationship management). Finally, the ones that stand out like sore thumbs are usually in great shape due to some other hobby/skill (tennis, lifting, swimming, soccer etc.).
Summary to Avoid Wasted Talent: 1) don’t listen to people who haven’t made it as you can find someone who did. While it is true the person who didn’t make it may be right, it’s always better to just find someone who made it as they are likely to know the next steps and be “ahead of the curve”, 2) take things to the extreme since you’ll never regret giving everything you’ve got and you’ll always regret 50% effort days, 3) follow the value chain to figure out how far the specific talent can take you, sometimes you only need one talent – seriously – if you’re the best golf player in the world or best salesman in the world you’re set for life money wise and just have to worry about health and 4) you don’t need to make people feel bad about themselves. You simply smile, nod and agree. This allows you to maintain a healthy relationship at a distance. They won’t be with you 24/7 and won’t realize how you made it out in the first place.
Part 2 – 2021 “and Beyond!”
There is a hilarious meme going around talking about QE Infinity “and Beyond!” with the sounds from Toy Story. While funny in nature, we have to think about what the market is telling us today and what people are doing differently. We got a back and forth on Twitter and there are really people who believe there will be no impact to retail. This is beyond delusional and these people should not follow our account anymore as they are hopeless. While retail will see a snap back due to a boost in temporary demand, the long-term trend has been the same for 20 years and will continue. ANYTHING that is a commodity is going to go online since the cost of doing business with only warehouses is significantly smaller than retail shops. We do agree that clothing will still be around as people need to try things on… But believing commodities won’t continue to move online is just nonsense. Sorry, there is no way we’ll be wrong on this one as it continues to happen, higher margins online = ability to lower price = more competition = consumers over the long-term choose the lower price since the quality is exactly the same (a professional baseball is still a professional baseball). After that annoying rant we can look at 2021 (and beyond!)
Unemployment: You can track some of the start up layoffs here (https://layoffs.fyi/tracker/) and you’ll see that the numbers don’t look great. We’re going to go ahead and say that there is a limited chance we get near 4% unemployment again by the end of 2021. Lots of companies will realize that they had bloated cost structures, a lot of the work was not value additive and that headcount could be reduced without a loss of revenue. So in 2021 you should be prepared to operate at a lower cost structure (for your business) or operate at a lower operating expense line for yourself (personally). This will give you additional wiggle room for the next 12 months as restructuring across every industry is likely. No one is irreplaceable and since many of our readers likely work in a career, operate as if you may get cut in the next 12 months. If you make it through 2021, 2022 should be perfectly fine. A good motto should be “Survive twenty twenty one and done”.
Online Boost! Guess what you lucky reader you… If you listened to the advice from this blog over the past 8 years you’re going to be in great shape! You will likely see a drop when the quarantine is lifted as people reorganize. But. You’ll find that your baseline sales are going to be higher than before. If you were doing say $25K in net profits a month before the pandemic, saw that jump to $35K it will likely drop but normalize closer to $28K. We’re making estimates of course but the picture is clear. More and more users now know how to purchase things online. Your total addressable market (TAM), just got bigger forever. Some people will not come back but the number of people who will be comfortable with online purchases just went up forever.
Decrease in Density: The ides of living in NYC just got significantly less appetizing for most. This will likely lead to a decrease in major city density. If unemployment is generally higher, once the 6 months of extra money dries up, people will likely move to lower cost regions close to the hubs. Think 30 minutes away from the major city, draw a circle 15-20mins away from the major city you’re next to. That’s where people will push out to.
Longer term it’s hard to see if this sticks but it will make logical sense for the next year or two. While Americans pride themselves on being tough, especially in NYC, lots of people won’t be able to afford it so you should see a bit of a rebalance. Slight rise in pricing further out and a drop in the city center.
Anti-Asian Sentiment in 2021: China hasn’t been a good partner to the USA for a long time. Stealing intellectual property, sending fentanyl and now the virus. While it is a growing country based on GDP, its hard to see the US being positive on China. The average american doesn’t know anything about Asia so you should assume that anyone who looks Asian will be considered “Chinese”. For those that are well traveled and educated, this sounds absolutely crazy. If you’ve lived anywhere near middle class you know that it’s also true. The average person doesn’t know the difference at all.
What this means for you? Try to avoid using ads that feature asian men/women. Don’t associate your brand with anything Asia related. You’re going to be better off. Also as an individual, since you’re smart, you should look out for discrimination. Why? You can find talented people who were wrongfully fired. It sounds terrible and cynical but it’s also true as we’re only referring to business/making money. Racism is always going to be around in some pockets of the USA and this pandemic will highlight the people who are outwardly racist against this demographic. You have to hold these ideas separately which most won’t be able to do: 1) anti asian sentiment will increase even if not Chinese, 2) it’s a good idea to move away from China and 3) you should look out for wrongfully fired talented individuals. It is crazy, but there are videos of asians being beaten up on trains and they are not even Chinese and likely were Asian Americans. To end on a positive note, this won’t last too long, similar to what happened after the 2001 terrorist attack (negativity towards middle eastern people).
Kids and Divorces: Due to the lock-down anticipate more divorces and more kids! This is also a reality that is starting to play out. We talked about other demographics opening up (mostly older via online sales) but you could see a big spike in children. This would be a good opportunity to create an online business catered more towards families. If you’re a real genius you can find one that works with newborns and with people who are still living at home with their parents (a likely trend as hiring slows for at least a year). Anything that addresses those two trends in 2021 should be winners. This can’t be a better example of the whole “Yin and Yang” concept. While divorces go up, birth of kids also goes up while older people are being impacted by this terrible virus. Nature has a strange way of keeping us all in check.
