Liquidity of skill |

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2021-06-17 00:00:04

Here is a mental model I share often with friends looking for job opportunities: your ability to get a job is the product of two quantities, the value of your skill and the liquidity of your skill.

The value of a skill is the fundamental value you add by applying your skill to a task. It is the difference between a task done with your skill, and a task done without. If I need to build an app to solve a problem, and I can use my programming skill to pull it off quickly and produce a good product, I’ve added some value to this task by being good at programming. That difference that I made is the value of my skill.

The liquidity of a skill is how easily and readily you can convert your skill into some other kind of useful resource, like money, social capital, or influence. If I’m only a mediocre programmer, but there are 10,000 people who know exactly how good I am, I’m going to be able to make more money and get hired quicker than a world-class programmer who anyone barely knows.

Some skills are inherently more liquid than others, but there are ways for everyone to make their skill more easily convertible to money or influence or whatever else you desire.

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