Creative Constraint Exercise

A creative exercise in business ideation by using constraints to force new thinking patterns and identify non-obvious opportunities.

Core Constraint Exercise

• What if I can't operate a company?
• Forces exploration of alternative business models
• Creates creative tension to think differently
• Helps avoid defaulting to familiar startup patterns

Alternative Paths Identified

• Buy existing businesses and place operators
• Focus on investing activities
• Create without operating
• Pursue judgment-based activities vs operational ones

5 Levels of Value Capture (from lowest to highest)

1. Logistics and Labor

   • Highest amount of work
   • Lowest value capture
   • Example: Construction workers building a house

2. Optimization

   • Incremental improvements
   • Typically manager-level work
   • Focus on efficiency and growth
   • Slightly better value capture than labor

3. Performance

   • Example: Podcast hosting
   • Results directly tied to execution
   • Better value capture than optimization

4. Creativity

   • Original idea generation
   • Content creation
   • Code writing
   • Higher value capture

5. Judgment

   • Highest value capture
   • Least laborious work
   • Example: Warren Buffett
   • Paid for decision-making quality
   • Can go years without making moves
   • Pure judgment-based compensation

Key Insights

• Each layer captures more value while typically requiring less manual labor
• Moving up the hierarchy requires different skill sets
• Understanding which layer you enjoy most helps career planning
• Possible to operate at multiple layers simultaneously
• Judgment layer requires patience and conviction