The Carrot And The Stick


Every time the incentives between what the users want and what the company wants are misaligned, the company has a choice.

They can either use a carrot or a stick.

Say, users want to both make and view photos digitally.

But your business model works by supporting analog.

You got a choice to make. A choice that seems so obvious to most companies that they don’t even realize they’re making it.

You can either do

Stick: Force the user to keep supporting your business model by using all your leverage and make it extremely hard to do what they want.

Carrot: Give users what they want and then put the burden to figure out how to monetize it on your own shoulders.

I’m drawing a blank thinking of companies who chose carrot because it’s so rare.

MBA style education is too business model focussed. And while it’s important to pay the bills, you’re only able to do that (as I always say) by the grace of your paying customers.

You aren’t getting money. They are giving you money. That’s a huge distinction.

This essay can be boiled down to a single yet extremely crucial insight:

Force your business model to fit your customers, don’t force your customers to fit your business model.

RJ Youngling