This week’s core concept: The curse of knowledge
- Definition: When we know something, it becomes difficult to imagine what it’s like not to know it. This cognitive bias causes us to subconsciously assume that others share our background and understanding, leading to gaps in communication, decision-making, and values assessment.
- The core problem: The knowledge we possess can paradoxically become a barrier to connecting with others, especially our customers.
Application: “Value Asymmetry” in Product Pricing
This concept perfectly explains the value perception gap between buyers and sellers, which I noted last week. The curse of knowledge is the root cause.
The seller’s curse: Trapped by “Cost” and “Competition”
- The Internal View (the Curse of Cost): Sellers are intimately aware of their products’ backstory – the R&D costs, the years of development, the obstacles overcome. This knowledge biases them toward defining value based on ‘how much effort I put into it.’
- The External View (the Curse of Comparison): Seller also know their competitors’ features and price points. This knowledge traps them in an anxiety of comparsion, making them afraid to set a price that is perceived as too high.
The Buyer’s Clear Perspective: Caring Only for the “Solution”
- Buyers are free from this curse. They don’t care if a product/service took two years or two days.
- They operate with one simple but powerful question: “What problem does this solve for me, and how much value (e.g., increased revenue, saves time) does it bring?
Breaking the curse
: Shifting from “Product value” to “Customer Value”
How do we overcome this curse? The insights from top sellers point to the solution.
• The Mindset Shift: The focus must shift from the product’s “intrinsic value” (cost) to the “perceived value” it creates for the customer. Value is ultimately defined by the customer, not the seller.
• The Market’s Definition of Price: If someone is willing to pay for it, then that is the market price. This simply proves that you have successfully communicated a value the customer recognizes. You don’t need to find a perfect, “objective” justification for your price, because value itself is subjective.
Reflection: The “Hammer Trap” in the Information Age
- Knowledge Anxiety (FOMO): In an era of information overload, we are constantly afraid of missing out and feel compelled to absorb new knowledge. However, if this knowledge isn’t converted into effective action, it becomes a burden and can even be misleading.
- The Hammer Mentality: This perfectly illustrates the metaphor, “If all you have is a hammer, everything looks like a nail.” When we learn a new, powerful concept (like AI or a certain business framework), we can fall victim to the curse of Knowledge, trying to apply our new “hammer” to every situation, while failing to see the unique nature of the problem or another, simpler tool that might be more appropriate.
Perhaps true wisdom isn’t about how much you know, but about the ability to “forget” what you know at the right moment. It’s about returning to the core of a problem and using empathy to see the world from the other person’s (the customer’s) perspective. The goal of learning isn’t to collect more hammers, but to build a complete toolbox—and to know when it’s time to put the hammer down.