Why did you buy your computer? Or your car?
What made you choose your college? Or Your major?
Hundreds or thousands of hard-earned dollars out of your pocket.
But somehow, the exchange was worth it to you.
And why not the other car?
Why pick the Linux machine over the Windows or Apple system?
How about your significant other?
How did you decide what to eat for lunch today?
The answer to all of these questions is the same.
But first, a few laws of human nature:
- There is no ‘society’. There are no nations of people. Or tribes. Or parties. There is no ‘common good’. There are only individuals, which make up these groups of people. But without individual people, groups cannot exist.
- Individual people will always pursue things, ideas, people, or information that make them happy. This is why groups form. But remember, before a group can exist, there must be individuals pursuing what makes them happy.
- Different things make different people happy. When you eat lunch today, maybe it will be a sandwich, a soda and a bag of chips. And if that’s your lunch, you have decided that will make you happy. To someone else, lunch is a big salad with chicken and an apple. And that’s what makes him happy.
Each person has a limited set of resources with which to pursue happiness:
Given a limited set of resources, each person will, by human nature, choose to use his/her resources in a way that he/she believes will maximize happiness.
So the reason you drive the car you do and the reason you chose the Apple over the Windows computer is that, given your resources, you decided that those things would bring you more happiness than their alternatives would have.
That is why we make every decision we make – to maximize our happiness.
So what can we do with this information?
When we understand that a person is out to increase his happiness, we can find out what will accomplish that goal and provide it to him.
This is the foundation for success in all human relationships.
When you were shopping for your computer, you might have wanted these things:
- Easy to Use
- Little risk of virus problems
- Runs all kinds of programs and applications
And Apple knew that all of those things would make you happy. So they made them available to you.
You decided that ease of use, reliability and performance were more valuable to you than the $2,000 you had available to spend.
Your happiness (profit) is:
- reliability(time, energy)
- performance(time, energy)
- ease of use(time, energy),
- the ability to produce and communicate (property, time).
Apple’s profit (revenue):
- $2,000 (property)
The key here is that Apple knew what would make you happy and they made it available to you at a price that was less than the happiness you gained.
On the other hand, if you were looking for a very inexpensive computer with an operating system you were familiar with that needed occasional maintenance, a Windows computer probably would have been a better fit.
My friend John, as he does every Tuesday, will go to Taco Bell. Yesterday, he went to McDonald’s. And tomorrow, it will be Wendy’s. He has a different one for each day of the week and he has named them “the five food groups.” His version of a balanced diet.
So John’s happiness is increased when his food is inexpensive and fast. He can drive through, pay a little bit of money and be on his way.
Another friend, Steven, will go out to a trendy, sit-down vegetarian restaurant where a fruit salad, veggie sandwich and power smoothie will cost $17.
And he loves it.
To Steven, $17 is well worth the happiness he receives by being waited on at a trendy restaurant and eating food he believes is healthy for his body and mind.
So one friend values fast and inexpensive.
The other values trendy, full-service and ‘healthy.’
And each restaurant knows what its customers want, so it can cater to those wants.
The two examples above illustrate two things:
- Every person has different values that will bring happiness
- When selling, those values must be satisfied or the customer will not buy
Something for Nothing
The pursuit of happiness is the goal in any transaction. But it is not only the customer whose values are important. The seller’s values are of equal importance.
The seller’s goal is to profit. His pursuit of happiness is in the form of monetary profit.
This is why in a free market, there are no free lunches.
No individual or business will accept something unprofitable to himself.
This is the law of human nature that creates the free market. Everything has value. In the free market, transactions can only take place when both parties profit according to their own values.
‘What about when someone donates to charity. No exhange of value has happened there, right?’
Wrong. Remember, value does not always have to be monetary, it only has to satisfy the need by both parties to increase their own happiness.
So in the case of charity, the giver’s happiness is increased when he gives. That is all that is required.
Simple Success Formula
In all human relationships, the formula for success is simple:
Provide value that will make someone happy to the extent that he will give up something that you value in exchange.
Offer resources that are greater, by his own values, than the resources he is giving. Offer something in the other person’s own self-interest.
The simplest way to succeed: Serve another’s self-interest before your own. Figure out how to make someone happy. Repeat.
In business: Provide something the customer values more than he values the resources he gives
In jobs: Give more time/effort/talent of greater value to employer than money he spends
In relationships: Make the idea of spending time with you more attractive than what is given up
A Few Great Resources:
Dale Carnegie’s How to Win Friends and Influence People
Sales legend Gary Bencivenga recommends this one.
Charlie Hoehn’s Recession-Proof Graduate PDF (free)
Economics in One Lesson – Free PDF
Are you doing your best to serve before trying to profit? Let’s discuss. Leave me a comment!