Of Mediocristan and Extrimistan business worlds
By Peter Opondo | May 5th 2021
If you were to measure the heights of all the 27.5 million males in Kenya and plot it on a graph, nearly all measurements would cluster around the average height, which is about 1.7 meters.
Put differently, if you measure the height of most Kenyan men, a majority will be near or around 1.7 metres and the further away you move from the average height the more unlikely you would find an example.
That is a classic case of the Mediocristan world, a term coined by the author Nassim Nicholas Taleb to describe a realm governed by the tyranny of the physical.
In contrast to the Mediocristan world, there is an Extremistan one, where there are no physical constraints.
The digital world is an Extrimistan space and the key thing to note is that any business whose products can be digitised is moving from Mediocristan to Extrimistan.
In the Mediocristan world, you would aim to charge a standard price to get as many people as possible to spend on your product.
Your total revenue is an outcome of the average price multiplied by the total number of customers. The assumption is that all your customers get the same value from your offering.
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In the Extrimistan world you appreciate that some customers value your products more than others, and would be willing to pay much more for it.
So don’t constrain them to pay the average price, instead design for them an offering that allows them to pay as much as they are willing to.
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