Country singer Kenny Chesney rarely writes his own songs, is a mediocre guitar player, a decent singer and a great performer. He earned $56 million in 2016. Meanwhile, a violinist in the Los Angeles Philharmonic - one of the finest musicians in the world - made about $150,000 in the same year.
Why does the world-class violinist make roughly 1/500 as much money as Kenny Chesney? The answer is skill/market fit.
Legendary entrepreneur and investor Marc Andreessen popularized the term product/market fit, which means being in a good market with a product that can satisfy that market. The same principle holds true at the individual level.
Skill/market fit means being in a good market with skills that can satisfy that market.
In today's world, machine learning is one of the fastest growing markets for skills. If you happen to be the type of person who is interested in this field and has relevant expertise, you are being richly rewarded. A recent New York Times article carried the following headline – “A.I. Researchers Are Making More Than $1 Million, Even at a Nonprofit.”
The world’s most valuable technology companies are aggressively pursuing the small number of people with skills in machine learning and artificial intelligence. As the NYT article states, “there is a mountain of demand and a trickle of supply.”
A similar dynamic is playing out across other industries. As professional sports teams become more data-driven, they are scrambling to hire talented data scientists. As the business of music evolves, more value is shifting to artists who can deliver moving live performances. As the field of marketing becomes more digital, media mavens that leverage new tools to create value for brands are in high demand. The type of people who have, or can develop, these skills are being rewarded accordingly.
The opposite is also true - there are many examples of extremely skilled individuals whose abilities are not well aligned with what the market values. The American Olympic team boasts some of the best decathletes in the world, but there aren't many people willing to pay them for those skills. Decathletes are just one of many examples of world-class athletes in obscure sports that work a side job to make ends meet. Your skills are only as valuable as the market they serve.
Do your homework and understand the dynamics of the markets you’re interested in. If a particular skill is in high demand but short supply, the value of that skill increases. If a skill is widely available, the wages for that job will be low.
Every organization is concerned, first and foremost, with its own survival. If you can help a company survive and grow, you will be viewed as a valuable resource. If you can’t, then it’s time to get to work on becoming more valuable.
Ultimately, you must decide what’s right for you. But just remember that your skills don’t exist in a vacuum – they exist in a market. The more you learn about the markets you’re interested in, the more conscious you can be about what to pursue and the type of skills you want to learn. At the end of the day, the alignment between your skills and the market will determine the type of impact you’re able to have and the amount of income you’re able to earn. If you want to make money and make a difference, it pays to be in a good market with skills that can satisfy that market.
“Shift your attention away from what you want (a billion dollars) and get deeply, intensely curious about what the world wants and needs. Ask yourself what you have the potential to offer that is so unique and compelling...then develop that potential.
The world doesn’t throw a billion dollars at a person because the person wants it or they worked so hard they feel they deserve it. (The world does not care what you want or deserve).
The world gives you money in exchange for something it perceives to be of equal or greater value.”
- Justine Musk