Barrier of entry talks about factors that make it hard for new comers to take over your job, your customers, or your industry.
The lower the bar in your skill level, the easier it is for market players to find a close substitute and kick you out. The higher the bar in your skill level, however, the harder it is for anyone to replace you.
How to Know a Career with High Barrier of Entry?
Let’s take an example…
Tunde works in Automobile sales at a Toyota dealership.
During his onboarding as a trainee, he got to choose between a customer-facing role with sales targets and other KPIs. Or a sales support role, where he’d help to ensure sales orders are processed smoothly.
Like most Nigerians, Tunde chose the support role since he and other trainees in sales will earn the same salaries.
Also, Tunde will face less stress upfront in the support role. Who wouldn’t like less work for equal pay?
But here is what was not obvious to Tunde at the time.
A sales role at the high level is a specialist role, where to succeed, you must be skilled in communication, negotiation, empathy, management, finance, etc.
Also it’s super tough to replace an elite sales person.
The network an elite person builds over the years can generate billions of revenue for a company. So, companies value them. Money talks bullshit walks.
On the other hand, a sales support role is a rinse-and-repeat job.
Once you learn the basic techniques, you get to do same thing over and over again.
In fact, it’s possible to grab a fresh graduate and teach them the job in 3 months.
There’s really nothing special.
For Tunde, he will come to regret 7 years later.
His fellow trainees, who chose a customer facing role and had to find creative ways to generate sales, now earn higher salaries and commissions.
Tunde appears to be stuck in a rut. He’s been on same salary for 5 years now.
No vertical or horizontal movement. Early in the year, his direct boss called him into his office and placed him on a personal improvement program.
What changed for Tunde?
Forget whatever you may be thinking.
He’s become very set in his ways and replaceable.
There are younger lads leaving University daily who can do what he currently does faster and cheaper.
Firms are created to make money for owners. He’s standing in the way of this objective so he has to give way sooner than later.
That’s how the world works.
Tunde is stuck in a rut because he chose a career path with a very low barrier of entry.
A performing sales person is hard to find; a grumbling support person is everywhere.
Where A High Barrier of Entry Comes From?
If you are just starting out, you probably want to know what qualities make a career path have a high barrier of entry.
I had the same questions many years ago when I started my career.
Below are the top 4 qualities that raises the barrier of entry for a career path…
Try not to become a person of success, but rather try to become a person of value
Being valuable means being able to help other people or businesses solve problems.
The harder it is for any random person to solve the same problem, the higher your value. People and businesses will practically beat their way to your door to have you deliver results for them.
To become a very valuable person, you must have spent many years in a particular domain building up specific knowledge.
The many years required to build specific knowledge in a domain helps you create your best self and a high barrier of entry.
Take the salesperson example, becoming an elite salesperson comes from years of refining your selling skills.
You can’t just pick any Mohammed and turn him into an elite salesman in 6 months.
You want to be a market of one
Rarity is what you should pursue when choosing a career.
If possible, you want to be the only person who can do what you are doing the way you do it.
The solution you provide must be so unique that no one can do it in a better way.
Rarity doesn’t mean you should try to hide knowledge or sabotage others.
It means no one can compete with you because you are playing at a different level.
For most careers, it is easy to find someone somewhere who can deliver the same solution faster and even cheaper. That’s why most careers have a low barrier of entry.
You want to work where your skillset is rare so the barrier of entry rises.
3) Imperfect Imitation
Wolfgang Puck and his wife Barbara Lazaroff, have it all. There are endless people who are either imitating him or trying to, but it is very hard to imitate somebody who is that good and that creative
When you have a creative solution that is valuable and rare, it is near impossible for anybody to imitate what you are doing.
Yes, they can try.
But their results will always be an imperfect imitation.
It can never come close to exactly what you have done.
4) Zero Substitute
Competition is for losers. If you want to create and capture lasting value, look to build a monopoly.
You want to have a unique solution, and for your solution there must be no alternative to it.
For example, if you are a skilled taxi driver, there is a limit to what you can ask customers to pay.
If you charge a fairly high prices, customers will use other alternatives like keke, okada, and buses.
This downside of having so many close substitutes is why being a cab driver isn’t a career path with high barrier of entry.
When choosing what to learn, you want to look for career paths with a high barrier of entry.
Careers with low barriers of entry are dead ends. Avoid them.
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