You ever see these ads on YouTube? There’s some guy, either standing in front of a mansion or a car, talking about how his system made him millions and now he’s practically giving away his secret sauce to you.
I’ll forgive you for clicking one of the ads out of morbid curiosity, but if you don’t already know how to spot a scam, then FYI that’s all these are.
Not saying the people are crooks, or haven’t legitimately made money—but if they’re “giving away their secrets” then they are either not giving you the good ones, or the secrets have been played out so they don’t work anymore.
No one will give away their secret sauce. No one will give you their recipe for success (beyond high-level principles). If they give you specific details, it better be in a one-on-one coaching session, or else it’s too general for you to use.
KFC can tell you how to open up a franchise restaurant, but they’re not giving away the 11 herbs and spices blend. They would lose the most important reason their franchises have value.
You won’t get secret advice from someone unless:
- They’re not using their own advice
- It’s too difficult for competitors to enter the field (either because the advice has expired or the barriers to entry are too high)
Competitive Advantage
Becoming rich involves a competitive advantage, and smart people don’t give away their competitive advantage. When you hear multi-millionaires telling you to stop buying avocado toast or $3 lattes, they don’t mean it. It’s a meme. What they really mean is “aim for productivity, not consumerism.” But avocado toast gets headlines, so that’s what gets repeated.
Like Ed says, even when someone does say what they think, it’s usually to trigger an effect. This is plain as day in politics, but powerful people in any realm (including business) always think in terms of power.
Ramit Sethi is one of the few guru-types honest enough to say “stop saving $3 on lattes while you’re giving up $15,000 on bad salary negotiation.” Get another 15k and you can 1k of that lattes every single day of the year.
There’s no secret sauce to give up—just common sense advice (that a lot of people don’t know).
He also advocates people to think bigger about how they earn money, though he tends to give pretty conventional advice (e.g. start a blog, sell your unused goods around your house, etc) but I still give him a ton of points for prompting people to think beyond just restricting their spending and start thinking about income.
Even with Sethi, he can give advice in areas like negotiation because, for employees, it’s not zero-sum. He doesn’t lose anything himself when he gives away that information (even if it does contribute to an arms race of negotiation skill development).
Zero-Sum Fields Always Hide the Secret Sauce
A huge amount of knowledge has diminishing returns when shared. The most obvious example is traditional stock trading.
Stock Trading
A hedge fund typically has zero incentive to ever give a thorough analysis of its choices and strategy. Why would it do all the work, create a research report of tremendous value, and then give it away? There are literally millions of dollars on the line.
“Edge” is all that any trader has over another, so it has to be preserved.
Ironically, a lot of retail traders actually want to give away their research for free. This is so they:
- Have their research vetted by other traders (since they don’t have a team of analysts themselves)
- Drive interest and attention towards their security, possible by hedge funds and other institutional investors
- Earn internet clout. Some people want to be the next influencer because they understand the importance of becoming a media asset.
Goldman Sachs will never give you their trading strategy. If they do, it’s because they think you don’t have the capital to execute on it. E.g. the techniques of high-frequency trading are not secret—you just don’t have the capital or technical ability to execute on it.
Why would someone with a winning stock trading strategy ever tell you what to do?
Freelancers
You’ll notice almost all the advice for freelancers for finding clients is about “taking care of who you already have.” Retaining > prospecting. Sure.
This doesn’t help you actually get clients though, and yet you see this advice ad nauseam. (I wrote this paragraph last week and I literally saw an email in my inbox repeating this advice again).
While retaining isn’t bad advice, there is almost NO advice ever on prospecting new clients (unless it’s something so high cost like “start your own community!” which is unrealistic for 90% of freelancers). If a freelance web developer told another developer how they got clients, then suddenly they would have more competition. Why would they do that, or at least for free?
The Gist
You won’t get secret advice from someone unless:
- They’re not using it themselves
- They think you won’t do it or it’s too hard to do
Let’s see two more examples of this just to drive it home.
1. They’re Not Using it Themselves
I like the book The 4-Hour Workweek by Tim Ferriss. It has genuinely has good advice. But Ferriss doesn’t use much of it anymore. He’s selling a lifestyle that some can achieve, but he made the calculation that selling a book would bring him more than keeping up that lifestyle.
I met a guy in Tel Aviv who sold vitamins and supplements online as Tim Ferris did. He said after the book came out, waiting times from suppliers went from days to weeks.
Tim isn’t dumb and knew the market would saturate once he published his book. But he decided selling a book and collecting royalties was worth more than the passive income from his vitamins. He was right.
2. They Think You Won’t Do it (or it’s Too Hard)
High-frequency traders think like this. Gary Vaynerchuk thinks like this. Vaynerchuk says “go flip deals from garage sales, go hustle and talk to 100 people a day, go figure out how to make video and vlog for 10 years” and while he did that himself, he can tell others to do it because he believes no one will catch up to him. Not conjecture—he literally says that.
His social media strategy was posting every day and doing it in a unique way no one else would replicate. For him, that was reviewing wine bottles while talking like a kid who grew up in Jersey. Now that he has millions of social media followers, and it took him 10 years to build that following, he believes no one else will catch up to his specific brand because he’s been cultivating it for so long that he has a giant head start.
This doesn’t mean listen to other people’s advice. It does mean take their advice but you ultimately have to create your own blueprint. No one else can think for you. Take advice from 1000 sources, and but at the end of the day, only you can find your own secret sauce.
1 Comment