Are you an asset or a commodity?
Tags: podcast, career, beginners, hiring
Published: 2019-06-16 15:29:30

I'm a Director of Engineering at a SaaS startup in Minneapolis. I’ve been recruiting, interviewing, and hiring techies of all stripe for about twenty years. I’ve probably screened or interviewed close to a thousand candidates at this point. One thing that never ceases to amaze me is how terrible techies are at professional packaging.

Professional packaging is how you present yourself to the market. That includes your manager and teammates, as well as recruiters and headhunters. It’s a crazy important skill, but most people get it completely wrong.

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. 

Let me explain the difference with a very simple example. 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 cost $2.69 which works out to 3.6 cents per sheet. The entire box of puffs cost  $1.99 which also works out to 3.6 cents per sheet. If you compare a Kleenex to a puff, they’re pretty much the same. Even the boxes are the same size and shape. As a matter of fact, you could 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? 

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 a Kleenex? You use it up and throw it away. 

Now let's 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’s 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. Layoffs happen all the time in commodity labor markets.

Okay let’s back up a bit. Forget about the Puffs and the Kleenex. Keep strolling around the store and you might find a box of Aveeno wipes. A box of Aveeno wipes cost $5.29. There are only 25 in the box which means each wipe costs 21 cents. Let’s break this down. A Kleenex costs 3.6 cents. A Puffs costs 3.6 cents. But an Aveeno wipe costs 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. Aveeno wipes are so different from Puffs or Kleenex that you won’t even find them in the same aisle at Target. Where do you find Kleenex and Puffs? Well Puffs are in the same aisle as toilet paper. Aveeno wipes, on the other hand, are in the cosmetics aisle. 

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 make-up, even waterproof mascara, oil and dirt that can leave your skin looking dull and tired…

And now I think you’re beginning to see why people will seek out fancy wipes and pay a 500% premium. 

An asset has a unique value proposition that makes it difficult to compare to other products. And because assets have distinct value, you want them more and you’re willing to pay more to get them. 

Now let's apply that idea over to the employment scene. Certain employees are like 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 first pick of the best jobs. 

This is a crucial 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 a Kleenex, they tend to be least affected by layoffs. 

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. I don’t want to be used up and thrown away.” 

Well my friends, if you would like to learn how to navigate your career _like an effing boss_ tune into [The Imposters Club Podcast](https://anchor.fm/imposters-club). Twice weekly I bring you tips and tricks to help you break out of the commodity trap and enter the asset zone.

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This post has been transcribed and edited from Episode 1 of the Imposters Club Podcast. Listen to the full episode [here](https://anchor.fm/imposters-club/episodes/Puffs-or-Kleenex-e45rut).