Business, PR/Marketing
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The 4th Black Swan: Common Knowledge and the limits of memory.

This post is a summary of the PR section to 逻辑思维.

Well the video was rather heavy in content–so let’s go point by point.

#1. In the past, authorities accorded legitimacy to a person who has shown remarkable results. They did this through providing awards, promotion, public recognition.

In today’s world however, there is no need for authorities to accord such legitimacy–we can all create our own legitimacy with the internet. People who have succeeded in creating such legitimacy are known as “Internet influencers”.

#2. We can conceptualise today’s era as one where there is an increasing rate of explosion of these “internet influencers”. Internet influencers and their fanbase can command extremely high prices because they deliver the value of helping companies grab a space called in the highly competitive, limited land-area of “common knowledge”.

#3. In an era where people can easily “shut out” truth or unpleasant things by blocking, filtering and deleting information on social media etc, there is only one common valuable thing left. And that valuable thing is the ability to make something “common knowledge”.

As long as you have that ability, you are worth a lot financially to the market.

#4. The smartest investors do not buy gold or estate today. They invest in intellectual property (IP). Because there is limited space to “common knowledge”, it is then important to engage in a “common knowledge land grab”.

The logic is as follows: As long as you have a piece of this “common knowledge”, it will be worth a lot of money. Luo Pang argues that this is precisely Trump’s strategy in running for white house– Trump wants to have a common knowledge of himself as “President Donald J. Trump”. After he has it, he will be worth a lot of money.

Therefore, regardless of ability, the logic is to mark that common knowledge spot of President as “his”, first.

#5. Therefore, there emerges such a concept as “the common knowledge tax”. In order to make something “common knowledge”, it is so important to borrow the fanbase of influencers. Therefore, influencers “tax” companies in terms of advertising fees. The larger and more relevant the fanbase to the company in question, the higher this amount of tax. And this tax is getting higher and higher as companies increasingly compete for a piece of “common knowledge”.

#6. If–as a company owner, you do not want to pay this “common knowledge tax”, then the only other alternative is to compete for that particular spot in “common knowledge”. This war with your competitor for that particular spot will definitely be bloody.

#7. Luo Pang defines businesses as “Common knowledge” fundamentally. He quotes this famous sociologist– that apart from basic needs, human beings hang on the web and threads of meaning they have weaved for themselves.

#8. Diamonds, Luo Pang points out, are mere carbon. It has demand because of its meaning. Vitamin C and milk are not really essential items in life–scientists have long argued that every human being can get nutrients from both items from other daily food sources. Yet people still chose to believe that Vitamin C and milk are both “must-have” because these items are reassurances of a higher quality of life.

In other words, “vitamin” and “milk” are common knowledge of a healthy life. Consumers base their purchasing decisions on “common knowledge”, NOT facts.

#9. Correspondingly, if there is no demand, then use meaning to create demand. If there is no market, then use common knowledge to create a market.

#10. So what should we produce in today’s age? How do we produce something such that it becomes “common knowledge” that it is “we” who produce it? How do we create a unique space in the minds of our consumers–defined by us–that becomes common knowledge?

#10b. The human’s memory is incredibly limited. Therefore, once a company A has occupied a piece of “common knowledge”, it will be very difficult for company B to vie for the same piece of common knowledge.

Luo Pang posits that we don’t even read instruction manuals these days whenever we purchase electronic gadgets. Neither can most of us easily recall more than two shampoo brands.

#11. HOWEVER, even if it a company refuses to pay the “common knowledge tax” to establish a new “common knowledge”, after a period of fighting the “common knowledge” war with a competitor (refer to point #6), there will be a new “common knowledge” that “oh, this company B is company A’s competitor”.

The corresponding “common knowledge” will be “oh, they are fighting for the same space in common knowledge”.

#11b. Depending on market size, this “common knowledge” that results from B’s hustling may be valued highly in the capital market, especially if company A is a company as big as Alibaba Inc. It is even better if company B is seen as the only competitor to company A, in spite of being relatively new or extremely small in absolute resources.

This is then strategic because company B does not win in factual terms. It won in the war on “common knowledge”, which is independent of verifiable data.

#12. Example of Xiao Mi is given. The common knowledge of Xiao Mi today is “it’s cheaper, and it’s not bad”.

#13. In today’s big big world, there is a possibility of everyone to have a piece of “common knowledge”.

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