The Mechanic and the Mark

Late last night, a friend and I strolled through Midtown Manhattan — wandering through bustling stores and glowing billboards and the rest — while chatting about entrepreneurship. It’s more an art in balance, patience and passion than a science in management or commerce. During our stroll, my friend shared one of those little business stories everyone loves, which I’ll recount to the best of my ability. Without further ado:

A wealthy couple’s newly-restored antique car breaks down in the middle of a road. A ruptured cylinder, faulty ventilation pipe, engine failure… who knows. Whatever it is, it’s jeopardizing the decade-long restoration process of this priceless, pristine automobile, and the wealthy couple is frantic with concern.

Over the next few weeks, they haul the car to every mechanic in the state. No one’s able identify the source of the issue. Within a month, the wealthy couple has spent $1M on diagnostics — still, no insight.

Then, their telephone rings. The caller states he’s a mechanic specializing in just the sort of antique car they have, and he’s happy to field their case — for a price. “A million dollars,” he announces. Of course, that’s equal to the costs they’ve already incurred. But, in their desperation, the couple hires him in full.

The mechanic props open the hood of the car. He stares at the shiny mass of tubes and blocks and vents before him for just ten seconds, and retrieves a marker from his back pocket.

With a decisive, deliberate sweep of his arm, the mechanic draws a fat black X on one of the parts.

“This is the spot, right here,” he proclaims. The couple rushes over to view his work. “Oh, thank you, thank you!” they exclaim. “How long until you to fix it?”

“I can’t.”

Wait, what?

“I can’t. No one can. This part hasn’t been manufactured for a century, and the machining specs are long gone. It’s irreparable. But then, I suspected that before I called you.”

A tense moment ensues. “You’re insane!” the wife finally stammers. “What the hell are you charging a million dollars for?” adds the husband. “I could’ve drawn that mark myself — anybody could’ve!”

Replacing the marker in his pocket, the mechanic turns and replies:
“$1 for drawing the mark; $999,999 for knowing where to put it.”

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The story sheds light on a couple of interesting entrepreneurial ideas, which I’ll enumerate here based on my own understanding. Some of them are intuitive, but it’s good to spell them out anyways:

People and positioning can be more important than product.

One great example, of course, is Instagram. Their idea was sort of new, but not shockingly innovative, and their execution was nice, but far from perfect. Nevertheless, that had the right idea at the right time, marketed in the right place, and employed the right people. It was largely a question of competition and expertise. In the end, they were acquired by Facebook for a billion dollars.

Price is not a transparent indicator of value.

My favorite example is Apple products. I love Apple’s work, and I’m willing to pay a premium to get my hands on it. My PC and Android friends tell me I’m crazy — “You can get better hardware for an even better price!” they insist — and it’s often true. But I’m not paying for the sum of parts, I’m paying for a greater whole. I’m paying for the experience of engineers and designers who share my mindset, for an aesthetic, for a set of software, and for a power-user culture.

The story offers another, different reification of this idea. Even though all the others together cost the same as the final mechanic, and even though he didn’t put as much net effort in, his accomplishment was literally infinity-fold greater than theirs. On the other hand, the couple didn’t perceive this worth in the same way, so even though his price was fair relative to his experience, it didn’t reflect his value to them.

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I’m sure there are other lessons to be learned here, but I have to get back to work, so I invite you to let me know your questions, contentions and suggestions. Also let me know if you think there are lessons or examples I should add. Stay humble, stay well. ₪