Value Arbitrage

you can arbitrage not just products, but also information, knowledge, skill, or even human relationships

This is an extremely useful idea that I’ve learned just recently. In fincance, “arbitrage” means buying and selling things in different markets to take the advantage of difference in price. Like buying a toy in India for $15, and then selling it for $25 in the US.

Turns out, you can arbitrage not just products, but also information, knowledge, skill, or even human relationships.

For example, let’s say you have met two amazing people who don’t know each other. When you introduce them to each other, you generate a massive amount of value for both of them essentially out of nothing — you have given each of them a gift of knowing someone great.

Another example, is arbitraging information. Eliezer Yudkowsky have learned a lot about rationality and human biases from the books he has read, and then parlayed it into his blog, and later a Harry Potter fanfiction — and that has generated a huge amount of value to the people on the internet, who would never have been exposed to these ideas otherwise.

Similarly, I figured out that you can take the essays he wrote, and produce short entertaining videos out of them — that way you are exposing the same ideas to a whole new audience, and that, again, generates huge amounts of value.

You can also arbitrage skills. That simply means applying good ideas you have learned in one field to a completely different one. I’m constantly applying the skills and ideas I’ve learned as a 3D artist to my programming process, and, surprisingly, the ideas I’ve learned from programming are making me a much better artist.

Finally, an unexpected idea that I have discovered, is that you can arbitrage fiction tropes. You can take a trope you have seen in one story, apply it to a completely different genre, and it will create a new and interesting idea. You can take a scifi trope and set it in a fantasy world, or you can take a plot structure from a dramatic tv show and use it in your comedy script.

Smart ideas are often universal. Learn a mental pattern in one field — and apply it elsewhere. Now that I got pretty good at it, every time I have an epiphany in one of my crafts, I intentionally go through each of the other fields I’m interested in and apply it there. This has helped me to generate a lot of very interesting ideas.

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