So one interesting idea that my friend Melvin Soh was sharing is that…
Social Economics Drive Demand
Case in point:
When he ran X-Factor Marketing from 2019 to 2022, he grew the business from six figures to multiple millions of dollars in revenue.
Many of his coachees made millions of dollars from online courses and webinars.
Mel did a breakdown and attributed that the growth of online businesses truly happened during the pandemic and lockdowns.
During the lockdowns, people had to be home.
They had nothing to do but surf the web and scroll social media…
This was why, in hindsight, FB ads and digital workshops worked so well during 2020 and 2021.
The economy was thriving due to government stimulus.
People were going on a buying spree, splurging on property and luxury goods (such as Bags or watches).
Or they would invest in the crypto or stock market (Which is why we saw an All time high in asset prices).
These may give the illusion that the economy is booming which in reality it isn’t…
Businesses that saw their profits skyrocket could think that they are geniuses but in reality, it was the Covid-19 event that propelled their sales.
The online businesses that crumbled during the pandemic were brick-and-mortar industries.
But they revived after the lockdowns were lifted in mid-2022.
On the contrary, webinars have seen a decline in attendance since then.
Because people were sick of going to another workshop disguised as a free preview.
Also, after the pandemic or lockdowns, people went on “revenge trips,” visiting multiple destinations one after another.
This led to a boom in airline revenue in 2022 and 2023.
Melvin carefully analyzes the social contexts, allowing him to predict the trends affecting buying behavior.
This mental model shared is useful today beyond marketing – You could also use it to plan for your own investing.
(Because you want to invest in the industries that are high in demand. And the best way to do that would be through Social Economics).
Here’s how you do it:
See what people are doing…
And that extrapolate it (Try to see what their behavior could be like in the next 3-5 years).
E.g. Now you have AI, and you may see your children or people around you using ChatGPT.
You can sit and think about this AI trend…
What would it look like if this technology was 10X more powerful?
Businesses that relied on an information gap would be rendered obsolete.
(Because an AI could eliminate information asymmetry.)
Then you will have to provide your service in a way that AI cannot replace you…
Or you could provide new services that solves new problems that AI creates…
(This is an interesting topic for another day).
I hope you understand this concept because it will help you in business and every facet of life.
