Hey everyone,

Welcome to the 671 new readers who signed up since I last published 2 weeks in a row!

I’m trying out a shorter, punchier format to see how you all like it (not because it’s Sunday and I promised a post 2 days ago…)

This past week's been a productive one, posting virtually every day on LinkedIn and building loads at BRWM.

I find myself thinking about incentives often (perhaps a result of my line of work in financial advice).

Ultimately, almost everything in life comes back to aligning incentives in the right direction. Whether it’s financial markets, building a startup or raising kids.

And that's what today's piece is all about—the best incentive that humans have ever created: Money.

I hope you enjoy it.

The Ultimate Incentive

incentive /ɪnˈsɛntɪv/

noun

1. a thing that motivates or encourages someone to do something.
   "give farmers an incentive to improve their land"
   Similar: inducement • motivation • motive • reason • stimulus • stimulant

2. a payment or concession to stimulate greater output or investment.
   "tax incentives for investing in depressed areas"

Humans haven’t created a better mechanism for incentivising behaviour than money.

That’s because humans are inherently selfish. Money, in its current economic form, is a social technology that is the materialisation of humans' selfishness.

Over thousands of years, we’ve engineered a game where the way you win is to accumulate enough money to create (or buy) a better life for yourself.

Money (in the form of dollars, Euros, or Bitcoin) is the game currency, and the financial system is the framework within which we operate.

The crazy thing about money is it’s a complete paradox.

On the one extreme, it’s a bare necessity for survival (without enough money, one can’t put food on the table).

On the other extreme, it’s a frivolous luxury. I don’t need a gold-plated Ferrari—it’s a nice-to-have. But it’ll improve my perceived status among other humans if I have one.

(A rather crass example, but you get my point.)

The haunting beauty of this game is that every human on Earth has to play, whether they consented or not.

And before you question what I’m rambling on about, this game has a name.

It’s called capitalism.

The point of capitalism is for every human on the planet to accumulate wealth in the form of money.

And the point of humans accumulating money is actually to satisfy an even deeper desire we all have—to “make it.” In the true American Dream sense.

If you understand this very flawed human desire, you can use it to your advantage. I’ll tell you how with three stories—two are personal and one is a famous example.

I've always struggled with launching things, particularly when asking people to do things that I want them to do.

To be clear, I'm not talking about getting a customer to buy your product. I’m talking about the things before that.

Getting a customer to buy your product and part with their hard-earned money needs to make economic sense to them.

Your customer must feel that there's a reciprocal value exchange: the perceived value of your product must be at least equal to, or ideally exceed, the amount of money given in exchange. Any imbalance in that equation sabotages the sale.

What I'm referring to are scenarios where information or insights need to be obtained. Think about feedback on company names or market positioning. Nothing has ever stuck as well until I literally started offering people money to do the things I wanted.

A recent example of the success of this approach is our market research surveys for the future positioning of BRWM.

I've noticed that I've received a resounding response to these surveys, mainly because I'm offering participants a $10 Amazon voucher (a derivative of money) for completing the survey.

With this simple hook, people have been way more open to completing the survey. Especially considering this is purely self-serving for my cause and doesn't benefit them in any way.

Funny enough, some people have even told me not to worry about the voucher. The offer of money seemingly creates trust that spam callers and outbound salespeople wish they had.

This is one anecdotal data point where money as an incentive works flawlessly.

Another example is when my business partner used to send cheques in the mail to directors to encourage them to meet, in an effort to secure them as clients.

Worked like a charm. And most of the prospects never even cashed the cheque!

Probably one of the most famous incentive schemes was PayPal's referral program, where users would receive $10 in free money deposited into their PayPal account for referring friends to the app.

Even if this type of referral mechanism nearly put PayPal out of business due to its rapid scaling, it highlights that there is still no better incentive than money itself.

If you know of a better form of incentive, I'd be fascinated to learn about it.

I'll be writing a lot more about incentives over time, as incentives are at the heart of the financial services industry and ultimately drive global financial markets. I also find it fascinating as a psychological topic.

This is a valuable lesson for the next time you're trying to encourage others to do something you want them to do.

You've got to have the right incentives at the right time. And more often than not, the right incentives are financial in nature.

Money can serve as the pattern interrupt your prospects need to get them to do what you want them to do.

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Thanks for reading,

— Luca

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That’s it from me. See you next week, Luca 👋

P.P.S Let’s connect on LinkedIn and X.