The Trading Favors Economy

by Jay Deragon on 03/06/2014

favorsHas anyone every asked you for a favor?

Favors, and the trading of favors, has been around since the beginning of time. A favor is defined as something done or granted out of goodwill, rather than from or for remuneration.

Trading favors is one of the most important survival strategies in human history. Favors were a form of currency long before the first coin was ever minted. If your ancestor was lucky on a hunt for meat, he shared with his fellow tribesmen, knowing they would remember his gift when they were lucky next time.

Even while they are inventing the most breakthrough technologies, entrepreneurs must go back to these social rules to give their companies a shot at a future. Other people hold the key to information or access that could mean life or death for a new venture. With little money in the bank and the clock ticking mercilessly, the favor of an introduction to a potential investor, customer, advisor or new hire can mean everything.

Unfortunately no one teaches these soft skills in business school, and few people openly talk about their strategies for getting the returned phone call or opened door. But favor trading is rampant in todays connected world where money is limited rather value creation is the objective to create money.

Money is a useful tool, and tools are used to make life better. A life enslaved by money is a life run by the tool rather than a purpose. When people start a new venture, the biggest shock is learning how hard it is to get things done. You no longer have the power to instruct others to join your meeting, buy your products or answer your emails. Humbled and alone, you soon understand that relying on the kindness of others is the only way to survive. Experienced entrepreneurs understand one must tap into a complex social system of trading favors. But the system can be simplified by always remembering others how you can help them.

No one can build a business without the non-financial help of others. As long as you remember to give freely and chances are that others will remember your gift and return one along the way.

After all it is better to give than receive

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{ 2 comments }

Dick March 9, 2014 at 8:34 pm

Brilliantly put. I’ve watched this but never seen it explained so cleanly.
Thank you!

Francis Lambert March 6, 2014 at 4:52 am

Thanks for the interesting article Jay, I absolutely agree with you. But perhaps the best thing about trading favors is that they are not taxable!

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