Marginal Cost vs Full Cost

Fallacy of marginal cost when making decisions only applies when a fundamental shift has occurred. If no shift has occurred, making decisions solely on the comparison of marginal cost works.

That means when it comes to leveraging personal skills and connections, you should double down on what you’re good at if something fundamental about the environment hasn’t changed, whether this environment is distribution, relationships, technology, culture. But when it has changed, you need to take a deep breath and fully retool, and allow yourself the time and the mindset of a beginner in order to make the transition. That also means you need to save the money and create the environment so that you can do so.

How to tell if something fundamental about the environment has changed? It helps when you can extract the concept of something from the concrete something. For example, lots of front end frameworks proliferated in 2013, so lots of people felt like they couldn’t keep up. So they threw up their hands and would joke only the cool kids knew something new. The only way they could judge something was if it was new. You should only learn something if the underlying concept is something new to you. Concepts are an abstraction or generalization of how something works.

That’s why learning about something’s concept will go a long way. Knowing the how’s and whys of something, and finding a generalize-able abstraction will help you recognize shifts, so you can better make decisions in a changing world.

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