"How to Understand Why You Can't Earn Money Beyond Your Cognition"

This article is Lu Canwei's 47th original piece.

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I just saw Boyang's article discussing this topic, and I would like to share some thoughts on cognition and money, combining some recent insights.

When it comes to cognition, many people might think of various missed opportunities, the biggest being the missed chance with BTC. While everyone sees BTC skyrocketing, have you noticed that another thing is also experiencing a similar surge?

In 2013, a bottle of Moutai was worth 1.5 BTC.

In 2021, a bottle of Moutai was worth 1.5 BTC.

Although I know Moutai is very valuable, I never expected its growth rate to match that of BTC.

I remember back in 2009, when I was still a developer, one of the first batch of Android programmers in the country. We developed many applications, but they all eventually failed, including group buying, coupon clipping, and food delivery apps.

Is this a cognition issue? Perhaps, but many of these businesses ended up becoming very successful.

Nowadays, it’s easy for us to attribute our inability to make money to insufficient cognition, as if simply stating that we have enough cognition will enable us to earn money.

Everyone has a different understanding of cognition. My concept of cognition includes information symmetry, execution ability, and review; making money is just the result.

Information Symmetry

People often say that money can be made through information asymmetry, but how many truly understand what information asymmetry is? Why does it still exist in an internet environment that is so highly transparent?

My view is that most people subjectively reject information symmetry. With search engines so advanced, I don’t even need to open a webpage to search on Baidu; I can look up what I want to know on WeChat, yet many still refuse to seek understanding. Why? Mainly because they don’t see immediate benefits from doing so. Most people prefer to see a clear return on investment before engaging in any activity.

Take customer acquisition as an example. People have found it increasingly difficult to acquire customers offline, and the costs are rising. Then they see others acquiring customers online at a low cost and rush to buy ads, leading to skyrocketing ad costs, only to find that online costs are not lower than offline.

There’s an example known as the cinema effect: when the person in the front row stands up, the person in the second row sees this and stands up too, until everyone is standing to watch the movie.

In this example, the person in the second row initially faced a situation of information asymmetry. If they had tried to understand why the person in the front row stood up, they might have angrily scolded them for blocking the view of those behind.

However, this requires a premise: you must be willing to seek information symmetry. Here, I want to reiterate the previously mentioned barbell strategy: you can allocate just 10% of your resources to try things you don’t understand but may yield high returns. Even if you lose it all, your tuition is only 10%.

Execution Ability

If you look closely, opportunities are everywhere. For instance, recently, a Clubhouse invitation code was sold for 400 on Xianyu, earning someone 60,000 in a week. Some people created lonely frog events for Qixi, others made WeChat status videos, and some rushed to buy Moutai. Everyone thinks they can make money, but few execute.

The same applies at work. I don’t consider myself particularly open to receiving information, but if you’re willing to do things outside your job description, the benefits can be significant. For example, I was a backend developer, but since my company didn’t have mobile developers (in 2009, the market probably didn’t have this position), I started learning mobile development because H5 was needed in apps.

I knew that mobile development had a promising future, as did HTML5 technology. If I hadn’t chosen to learn, the benefits would have been irrelevant to me. For someone who didn’t attend university, getting into a big company is quite difficult, but I managed to join Ele.me because of my mobile development skills. If I hadn’t chosen to execute, I would have only been competing on backend skills.

When we believe that a certain opportunity has long-term benefits, even dedicating 10% of our energy to try it out could potentially turn into value in the future.

Review

Why is review so important? Everyone says to focus, but how do we understand focus? As I mentioned earlier, I see opportunities everywhere; can I just try them all? Of course, when you lack direction, the key is to start moving to find it. Many people will say that choice is more important than effort, but how do you know your choice is correct?

When your cognitive information is narrow, no matter how you think about your choices, you can’t break out of that narrow perspective. At this point, what you need to do is continuously experiment, learn, and review.

Your focus should be on why something isn’t working, what you did, and how you can optimize it. Even if you don’t see results while in this phase, regular reviews will help you identify areas for improvement compared to before. Even if a project fails, it can still provide residual value for your next project, such as experiences from failures, resources, users, etc.

Recently, I’ve been learning from some big names in operations. They often talk about maximizing benefits from a single resource, which applies to products as well. We can sell different products to the same user; many principles are universal, but the more you review, the clearer your framework becomes.

Currently, I manage to review once a month, dedicating a whole day to think about it. Sometimes, I sit at the keyboard and can’t write a single word. Even so, I persist.

When you consistently apply these three points, making money truly becomes just a result.

Recommendations:

Most people have no malice; they just don’t understand this psychological concept.

I hope you don’t always think about getting rich quickly; gradually becoming wealthy is what we can achieve.

Persisting in daily updates—is it just a self-satisfying celebration?

Let’s talk about Clubhouse today.

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