4 min read

Puffs or Kleenex

How to tell whether you are an asset or a commodity.
Puffs or Kleenex
The conventional hiring system is designed to do one thing: turn workers into low-wage commodities who can be used up and thrown away. And that's lame AF.

Show Notes

0:04
Hey folks, welcome to The Imposters Club, the podcast for misfits in tech. You know who you are? Who am I? I'm your host, Teddy Kim. I'm a director of software engineering at a SaaS startup, here in Minneapolis. And today, I want to talk to you about your professional packaging. Your professional packaging is how you present yourself to the market that includes your manager and teammates, as well as recruiters and headhunters. So yeah, it's a pretty important skill, but most people get it completely wrong.

0:36
I've been recruiting, interviewing, and hiring techies of all stripes for about 20 years, I probably screened or interviewed close to 1000 candidates at this point. And one thing that never ceases to amaze me is how terrible techies are at professional packaging. Professional packaging is actually pretty easy to understand, you can boil it all down to one basic concept from economics. It's the difference between an asset and a commodity. By the way, don't bother googling those terms, you'll just get a bunch of confusing academic articles back, let me break it down for you with a very simple example.

1:13
Imagine you're at Target and you go to the aisle where they put all the paper supplies, you find a box of Kleenex, and right next to it is a box of Puffs. The entire box of Kleenex costs $2.69, which works out to 3.6 cents per sheet. The entire box of Puffs costs $1.99, which also works out to 3.6 cents per sheet because there are fewer of them in a box. If you compare a Kleenex to a Puff, well, they're pretty much the same, even the boxes are the same size and shape. As matter of fact, you can mix them up entirely, and you couldn't tell the difference between the Puffs and the Kleenex. And that brings us to a key concept. The only reason you would buy Puffs over Kleenex is if you can get puffs cheaper. Because the two items are virtually identical. The only way they can compete is on price. When two interchangeable products compete on price, economists say that those products are commodities. So why should you care?

2:19
Well, commodity products have some interesting attributes. First, the price for commodity goods tends to be very low. If you can only compete on price, then competition naturally forces prices down. Second, consumers don't develop loyalty to commodity goods. Nobody feels strongly about Puffs or Kleenex, whichever is cheaper is what you buy. Third, commodities tend to be disposable. What do you do with the Kleenex? Well, you use it up and throw it away.

2:53
Now, I'm going to get real. What happens in a commodity labor market? In other words, what happens if one employee is virtually indistinguishable from another? Well, if two identical employees are competing for the same job, who do you think is going to get the job? Obviously, the one who will work for less money. But that's not all, working conditions in commodity labor markets tend to be pretty bad. If employers know they can easily replace you, there is no incentive for them to persuade you to work there. If you do get hired, there's no incentive for an employer to treat you well or to keep you happy because you're easily replaceable. And remember what I said earlier about commodities being disposable? Well, when a company uses up an employee and throws him or her away, that's called a layoff and I'm sorry to say layoffs happen all the time.

3:52
Okay, that was a lot. Let's back up a bit. Forget about the Puffs in the Kleenex, keep strolling around the store and you might find a box of Aveeno wipes. A box of Aveeno wipes costs $5.29. There are only 25 in the box, which means each wipe costs 21 cents. Whoa, wait a minute. Let's break this down. Kleenex costs 3.6 cents and Puffs cost 3.6 cents. But these Aveeno wipes cost 21 cents or nearly 500% more. How can that be? Well, the Aveeno wipe is easily distinguishable from Puffs and Kleenex. The packaging is totally different. The size of the wipe is different. The Aveeno wipes are so different from Puffs or Kleenex that you won't even find them in the same aisle. Where do you find Kleenex and Puffs? Well, they're in the same aisle as the toilet paper. Aveeno wipes, on the other hand, are in the cosmetics aisle.

4:51
Now, let's flip the package over and read the back, "formulated with moisture-rich natural soy extract, these gentle but effective wipes quickly and easily remove all traces of makeup, even waterproof mascara, oil, and dirt that can leave your skin looking dull and tired, closed quote". And now I think you're beginning to see why people will seek out these fancy wipes and pay a 500% premium. An asset has a unique value proposition that makes it difficult to compare it to other products. And because assets have distinct value, you want more and you're willing to pay more to get them.

5:33
Now let's apply that idea over to the employment scene. Certain employees are like the Aveeno wipes, they stand out from the crowd, they have unique attributes and capabilities that are hard to replicate. These asset employees are always in demand even in recessions and down markets. They skip to the head of the line and get the first pick of the best jobs. Now here's a key point. Assets don't compete with each other on price. In terms of competition, the roles are reversed. Employers compete with each other, to entice asset employees with bigger salaries, more perks, and so on. Employers work hard to get them and work hard to keep them. Because assets aren't disposable, like Kleenex, they tend to be least affected by layoffs.

6:24
Now, imagine what your professional journey would look like if you could package yourself as an asset. But wait, you say. I'm not an economist. I'm just a humble techie. I don't know how to package myself as an asset, much less avoid being a commodity. But I don't want to be used up and thrown away. Well, my friends stay tuned because the next few episodes of “The Imposters Club Podcast” will help you break out of the commodity trap and enter the asset zone.


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