Demand for anything is always greater when supply is limited. People want what they can’t have, and so scarcity creates value. Scarcity is not just about managing the availability of resources and limiting supply—it can be the foundation of a successful business model.

When Howard Schultz expanded Starbucks, he knew that it was the feeling of community and connection, not just a decent coffee that was scarce. Boutique hotels changed the definition of luxury by understanding that people craved delight, not only a comfortable bed and fresh towels.

As the world around us evolves what’s in short supply changes too. When everything is automated, personal service becomes more valuable. When commodities are plentiful, artisans flourish. When we can buy the factory-made on every street corner, we covet the thing that’s made by hand.

Every successful organisation and entrepreneur thrives not by knowing what’s selling—but by understanding what people want more of and don’t yet have.

Image by Thomas H