We ascribe more value to something we own than what we do not and therefore the effects of losing it hit home harder. This is called the endowment effect and has a few potential implications here, namely, entitlement.
Entitlement at Steemit runs rife and I don't know how many posts I have come across complaining about dropping support from accounts that previously received significant amounts. What happens is that once support is gained, it is seen as owned even though one has very little control over what comes.
The removal of support itself can happen for many reasons such as powerdowns, changes in tastes, new accounts to support or often, because the person supported has taken it for granted and hasn't shifted their content or, has dropped the quality significantly. There are many other reasons.
I have also read some posts where people are transitioning to Living off Steem which means they will have to consistently earn enough from the platform to cover their living expenses. For some here, that is possible based on their current earnings but this also comes with risks.
What I notice is that some of those who are doing this are content producers alone, not developers or Steem-related business owners. This makes their account the sole source of income and means they must continuously rely on the support of others that comes. This poses a problem.
If the majority of what is earned is used for living expenses, this may not leave a great deal to build ones own support base (Steem Power) which means that if something changes and support drops away, they will fall short of their income requirements with no way to prop it up.
Changes can happen fast, especially since the platform is still in Beta and experimentation is taking place. An algorithm change could fundamentally shift the support up or down. A large influx of users can too or, a large drop in the price of Steem or SBD.
Those looking to live off this have to consider the future of their account and whether it can provide enough even if they are unable to post or, if for some reason, large amounts of support is withdrawn. These things have to be considered in the same way a small business must consider them.
For example, I have a monthly day with a client company which provides about 20 percent of my income. Due to some unforeseen problems on their side, I just found out we will skip this month. For the client, this is an insignificance but for me as a one-person business, losing 20 percent of my expected monthly income makes things difficult. But, I am not 'losing' it as I am yet to have it. It is not owed until the work is performed. So, I have to prepare for these occurrences and adjust as necessary. The problem for my particular business is that there is no way I can make up for it on short notice.
A small business must be able to survive high levels of uncertainty and at Steemit, that means the customer's and patron's changing preferences and requirements for their own needs to be met. Steem income is not a pay check that comes in each month and there can be massive fluctuations in return.
As an additional supplementation to an existing income however, steem might be brilliant where basic costs are paid with a more stable income and extras with Steem. This would give the benefits but can still allow some more to be powered up to create a foundation for the future.
For me, it is about diversifying risks to some degree whilst increasing potential upsides. Even though living very basically and a little more would go a long way, I don't rely on Steem at all as it is my attempt at an asymmetrical upside for the future. But, if in the unfortunate eventuality of it failing, I still have my business as a fall back point which covers my immediate costs.
Something I do love about this approach is even though it is a massive amount of work to run both IRL business and Steemit business, the Steem side allows me to put a lot of value directly into a community and if prices increase, it will increase proportionately.
In my opinion, those looking to live off Steem should be the most invested personally on the platform and be working tirelessly to build the community. It has to become work where they give back, not rely on the charity of others. For the developers and businesses here, it is easier as the value added is quite obvious but, for the content producers, they need to do extra work beyond the boundaries of their blog and if they haven't powered up significantly, their upvotes won't cut it.
Of course, these are just some of my thoughts but I have also noticed a trend where people are claiming to be moving to live off Steem and thinks that makes them entitled to additional support. Again in my opinion, that makes them entitled to addition responsibility for the future of the platform that supports them and a much higher level of scrutiny from the community.
Once the transition is made, they become business owners and must therefore manage themselves accordingly. They must be able to stand on their own two feet and understand the risks of reliance on the charity and support of others.
For me, it is difficult to feel sorry for someone who has been enjoying all the upside of the platform financially without preparing for potential downsides. For if the downsides happen, it will be the people who struggled to build a base that become the support network for them.
Why would I invest what I have struggled hard to build into someone with a proven track record of using it only on themselves? Wouldn't it make more sense for me as an investor to invest my stake into those looking to build the community instead? It would definitely help the value of my stake more than someone solely financing their lifestyle.
There are many things to think about if attempting to make the transition but don't take it for granted that the support you currently have will always be there. It is not that every cent has to get powered up, nor every moment spent helping others but, there has to be some support for the community that you want to support you.
I wish those that try this the best of luck but I also know there will be many failures as just like there is in the real world of business, there is no such thing as certainty. The only advice I offer is develop yourself, the community and work hard.
Taraz
[ a Steemit original ]
I am in the hospital at the moment having treatment so this is written on my phone and will have a few more errors than normal. The treatment will also make me very tired for the next few days and maybe grumpier than normal. You have been warned. :P