Here’s a simple model I’ve been using lately to help some friends think about the infamous passion vs profit question.
I actually like to think of it as a passion AND profit … and value question.
It really is a simple model, but it helps highlight a couple of key points.
For one thing, the saying do what you love, and the money will follow, is misleading. I have a passion for driving my Jeep with the top down on sunny days, playing my favorite songs. It doesn’t create much value, except for me, and I don’t expect to make a profit.
Some things really are just for fun.
The Sweet Spot – The Intersection of Passion, Profit, and Value
Passion, profit, and value is the key to sustainable results:
- Passion. Your passion is your fuel for making things happen. In today’s skill-for-hire economy, one of your most important assets is your passion. It’s you’re staying power, and your get up and go, especially when you get knocked down. It’s how you get up again. Passion is also a proxy for your values, strengths, and purpose. Strengths can be skills, but in this case, I’m also thinking about your natural strengths … the stuff that comes easy for you, but might be tough for others. We tend to love what we’re awesome at, and, our passion tends to help us get awesome to begin with.
- Profit. This is about how much you can make. Just because you create tons of value, doesn’t mean you can make a profit, especially in an economy where free is the new price, and your competition gives away what you try to sell. How do you know what’s making a profit? You ask. This is where your network comes in. Also, your friendly neighborhood accountant might be the perfect source for knowing what’s making money, and what’s not.
- Value. The idea here is that if you’re creating value, you have a better chance of getting rewarded. Value is in the eye of the beholder. This means staying aware of what the market values and knowing that the market doesn’t always drive the right thing. This also means being aware of intrinsic vs. market value. Intrinsic value is what something is really worth, while market value is what people are willing to pay, which could be wildly inflated. Personally, I like to optimize around providing value for basic needs, and I’m cautious when market value and intrinsic value are out of whack … market corrections can be painful.
To give you an example of the passion, profit and value intersection, I have a passion for making others great. There’s a certain market value to that. I already do it for free, but if I wanted to profit from it, I would take on certain clients. For example, if Obama wanted me for his results coach, I’d give him my special presidential discount, but I would still expect to profit from the value I create.
OK, fine, I’d do it for free, so it’s not a great example.
Cutting Questions to Find Your Path
Here are some cutting questions to help find and test your paths …
- What would you do for free?
- What’s the minimum you need to make?
- What’s your minimum and ideal life style?
- How much do you need to fund your ideal life style?
- Who has the job that you want that you can model from?
Guideline for Getting Results
Some guidelines for results …
- Find the intersections of your passion, profit, and value.
- Passion, profit and value are sliding scales … this gives you a lot of flexibility as well as trade-offs.
- If you’re creating all value, and no profit, that’s a charity, and that won’t pay your bills.
- If you’re playing to your passion, but creating no value, that’s a hobby.
- If you do what you hate, you’ll suck your life force dry.
- Find the job you love, or love the job your with.
- You can love the job you’re with, by changing your why or changing your how.
- Some hobbies can be turned into profit, if they create value.
- Sometimes the key to unleashing your profit potential, is simply finding the right channel or platform.
- Be careful what you get paid for, because if you externalize your reward, you can kill your passion.
- Knowing the market demand and the profit potential can help you follow the money.
- Money is a means, not an end. When you’re below the line, it means everything. Once you’re above the line, happiness is doing what you love and service to others … you know, the stuff Maslow taught us.
One important point here is that life’s not static and neither is the market.
One strategy is to follow the growth. This includes following the growth in the market (think biotech, green, … etc.) as well as following paths that lead to your own personal growth.
It’s one way to keep the skills that pay the bills.