- I have a restaurant with a windy hallway. When my waiter brings you a salad, a few leaves of spinach will always blow off the plate. I lose the spinach and you don’t gain it.
- You rob my car. You break the window and steal the radio. I lose the radio and the window and I have to clean up the mess.
- I write you three drafts of a letter. I send you one. I lose three pieces of paper. You gain one.
This delta between what I lose and what you gain in a transaction is the transaction cost. It’s a constant question for me… how do I make sure my audiences get the majority of what I’m offering them? My best feeling in life is knowing that I’m serving someone well – that what I’m doing is being received. We don’t want to sing a song through a bad sound system, or tell a bunch of jokes that are mostly not the crowd’s taste, or tell a story that puts people to sleep.
When we’re underpaid for a job, I think this is the real cause of being bummed. We feel like we put a lot into something and nobody gained the results. A lot was lost.
Transaction cost is not bad and it’s not avoidable. Our job is to value engineer what we do to a point of getting the most spinach to stay in the salad. We do this by…
- getting better at understanding what we do
- empathizing with our audience
- remembering what our goals are
- honestly evaluating our work