I always thought building a business was out of reach.
As a kid, you don’t know any better.
The only thing you believe is possible is what was possible for your parents because that’s the only information you had access to. Over time, you develop small yet powerful limiting beliefs as to why you can’t have more freedom, more money, and more fulfillment.
That’s why I’m writing this letter.
Because everyone has those ideas, you know, the ones you tell all your friends about but never get around to doing anything about.
“Bro, we should build an app that’s like Tinder but for food places. Then people don’t have to struggle to pick a place to eat.”
But you couldn’t build the app, or the business, or any of the other things you dreamed of building.
Why?
You didn’t have the money.
You thought you needed investors.
You lacked so much knowledge and skill.
You loved the initial idea, but then your mind was flooded with LLCs and S-corps and privacy policies and all this other business bullsh*t you didn’t want to deal with.
I thought the same thing.
And I struggled for quite a long time.
That was until I realized that I didn’t need startup capital. I needed social capital.
What is social capital?
We’ll talk about that soon, but in short, it’s having a good reputation with an audience of people who want to pay you for the value you provide.
Once you have that, you have leverage:
- You can become a successful musician without a record label.
- You can become a successful author without a publisher.
- You can become a successful designer, programmer, or polymath without an employer.
- You can start almost any business and have the skill and potential customers to make it a success.
- You don’t have to rely on external funding, investments, or anything like that. You can build a team or network fast.
Even further, look at creators who get equity in large companies simply by putting their face on the brand. Think how Marques Brownlee is the creative partner behind the Ridge Wallet. Or how startups are giving creators equity so they can tap into an audience and grow fast, no paid ads required.
In other words, social capital is the currency of the next generation, not venture capital.
In other other words, attention is the new currency, but attention alone can lead to a shallow and vain life.
Social capital, on the other hand, checks all the boxes for purpose, profit, and peace, knowing that you’re providing value to the world.
Social Capital: Like Black Mirror, But Positive
Have you seen that Black Mirror episode on Netflix?
The one called Nosedive?
No?
It’s about a society that uses a social credit system.
Your reputation and worth are based on a 5-star rating that you hold as an individual.
Every time you interact with another person, they have a chance to “rate” you with 1 out of 5 stars based on their experience with you. You simply select a rating on your phone, swipe up, and the person’s rating goes up or down.
Your rating determines what communities you can live in, what jobs you can have, what people will accept you in their social circle, and so on. It’s very judgmental. As you can tell, the people with a high 4-star rating are the rich and snobby type. The people with a low rating are the poor and violent type (most of the time).
Now, a question for you:
Does this remind you of something?
The creator economy, perhaps?
Have you seen an uptick in people gloating about having a lot of followers? Or how that one girl disavowed her parents because they had barely any followers?
It’s a bit insane if you ask me.
But there’s a positive side to it.
The 3 Types Of People On The Internet
To the average person, the internet looks like a place out of Black Mirror.
People praise the influencers and celebrities who don’t care about them.
The influencers and celebrities get special treatment. Brand deals. Access to anything they want. They have all of the attention… they’re a marketing channel for other brands to speak through.
But influencers aren’t the only people on the internet.
And they aren’t the only people with power.
The second type of person on the internet is the consumer.
They aren’t there to contribute to the online space. They’re not there to provide a product or service. They’re simply their to be educated, entertained, inspired, and a lot of the time… infuriated. Often by the influencers, celebrities, and politicians.
But there’s a third type of person:
The creator.
I know that creators and influencers are somewhat the same, but I’d like to make a distinction between them here.
A creator, for the purpose of explanation, is a value creator.
Someone who doesn’t consume to the point of being mentally obese and someone who isn’t focused solely on vanity, validation, or seeing their number of likes go up.
A value creator is someone who builds their worth based on the value they create. The words they write. The products they build. The problems they solve. The music they produce. The code they type. In the context of social capital, there’s a bit more to the creator story.
They care about impact over likes, depth over looks, and truth over conformity.
In order to create value, there needs to be an audience – small or large – who perceives their creation as valuable.
If a tree falls in a forest and nobody is around, does it make a noise?
If a person creates a product and nobody is around, does it make money? Does it impact their life?
No.
1 X 0 = 0
So what does a creator have that influencers, celebrities, politicians, and consumers don’t?
The 3 Pillars Of Ethical Social Capital
Social capital isn’t just about building an audience.
Anyone can create viral TikToks and meaningless memes to appeal to the masses and provide nothing to humanity aside from the occasional laugh and cringe.
If you’re a writer, designer, programmer, any type of creative, or just an individual who wants to do what they want for a living, social capital is what you must build.
Social capital = distribution + reputation + value.
Here’s how to do it right:
Distribution
There are 3 types of distribution:
- Built – like building a following or newsletter.
- Borrowed – like people quoting your book or sharing your post.
- Bought – like paid ads or newsletter sponsorships.
The reason most people fail to build an income source out of a job is because they do everything but attempt to get customers.
They build the app and can’t get users.
They write the book and can’t get readers.
They make the music and can’t get listeners.
But if you simply focused on distribution, you’d be able to get your creation in front of other people. And that’s the only way you’ll be able to tell if it’s decent or useful.
You aren’t as skilled as you think you are if nobody likes what you do.
No, this isn’t about validation. This is about needing an income so you can sustain your passions full-time. Or else life gets assigned to you. You’ll justify how you have to work a job because nobody likes your work just so you don’t have to drop your ego and finally help other people.
With that said, everyone should build distribution.
Social media is free. Writing is free. Both are accessible to anyone with an internet connection.
Once you’ve built distribution and have leveraged that to earn an income, then think about bought distribution.
If you want to learn how to build distribution with writing, check out The Writer’s Bootcamp curriculum.
Reputation
You can build a large audience based on looks and likes, but that won’t take you very far.
Your building an audience of people who live in survival mode. Chasing that next cheap dopamine hit. They see you but not your mind. They view you as a commodity that can be left in the dust when something more pleasurable crosses their screen.
Value creators focus on depth, creativity, solving complex problems, and long term gratification by distributing insight that aids in understanding, not confusion and overwhelm.
They earn with their mind.
Not their time, looks, or labor.
One is infinite. The others fade with time.
One promotes centropy. The others increase entropy.
One is a net positive for humanity. The others are dragging it down to hell.
You can build distribution without reputation, but you’re left in an even worse spot.
Rather than not having any users, readers, or buyers, you have a massive audience of people who care about a part of you that will inevitably change. They don’t care about your work, and they won’t care about you in the coming years.
Value
You can write, design, build, and create all day long, but that doesn’t mean it’s valuable, and it doesn’t mean it’s worth paying for. And if it isn’t worth paying for, good luck sustaining your passions independently while having a shred of control over the entirety of your day.
Value = (the measure of how much people care about what you do) X (the magnitude of problems you solve)
Value creators don’t just create to create.
They create to solve real, tangible problems.
They don’t solve imaginary problems that don’t exist with cool startup ideas. They solve human problems. Health, wealth, relationships, and happiness. They remove the barriers to improvement and evolution from an individual.
You can have distribution and reputation, but if you don’t solve a valuable problem, you are a commodity, and soon enough, you will question the fulfillment that stems from your work. You will chase quick cash over your life’s work just to loop back around – as all burnt-out businessmen do – wondering where your life has ended up.