No mystery, no margin

There’s an old adage in business: “Where there’s mystery, there’s margin!” In other words, if you know something your competitors – or customers – don’t know, then you can profit from that information. Knowledge is power.

At least, that used to be the case; now, not so much. The internet, social media, and artificial intelligence have democratized data and information, and now everyone has access to everything. Knowledge is no longer power, it’s ubiquitous. If you need to know something, just grok it.

It’s the same with markets. Superior market information guaranteed you a profit. You could source something at a lower price, and sell it at a higher price to someone with less perfect knowledge. Simply being the first to know about breaking news or market movements could give you an edge, and provide you with arbitrage opportunities.

Some people lament that information democracy and intelligence ubiquity have upended industries and destroyed markets. Certainly that’s the case in the financial sector. But it’s also created new opportunities.

Power has shifted from those with the knowledge to those with the skill. When everyone knows everything, power lies with those who have the skills to execute, to act, to build. The new secret sauce in business isn’t a recipe or patent, it’s the ability to turn that data into a successful operation.

To take one extreme example: Everyone knows, at least in theory, how to land a giant rocket, but very few teams can actually do it, reliably. And make it cost-effective at the same time. Those are skills honed by trial and error, forged by failure, and encouraged by ultimate success.

And that’s where the mystery lies. Not in what needs to be done, but how to do it. That’s where the margin is.