How to Capture More Value in Your Career, According to Justin Welsh

In a recent LinkedIn post, Justin Welsh discusses a fundamental business dynamic: the discrepancy between the value individuals create and the value they capture. Welsh argues that professionals typically only capture a fraction of the value they generate in their roles, proposing a path for individuals to reclaim a larger share.

Justin Welsh outlines the traditional business model where employees receive a portion of the value they create, with the remainder being reinvested into the company. He uses the example of a salesperson with a $1 million annual quota, whose take-home pay might be around $250,000. The remaining $750,000, Welsh points out, is reinvested to fuel the business’s growth.

“You only capture about 25% of the value you create at work.”

While acknowledging that this formula isn’t inherently unfair, as the company provides the necessary resources and opportunities, Welsh suggests it can be a point of frustration for ambitious individuals. He poses the question, “But that has to itch a little, no?”

Reclaiming Value Through Asset Ownership

According to Justin Welsh, the key to capturing more of the value you create lies in owning the assets that a company provides. He identifies two primary assets: a product or service, and a distribution channel.

Welsh emphasizes the critical importance of distribution channels, stating:

“The easiest way to do this is to create your own distribution channel.

For example, I can singlehandedly create 100x more impressions for my business on social media than a typical startup.”

In Welsh’s view, establishing a personal distribution channel provides a significant advantage. He explains that once an individual has distribution, they can then focus on understanding market needs, developing solutions, and selling them directly. This process allows for the capture of 100% of the value created.

The Process of Building and Earning

Justin Welsh details a practical approach for individuals seeking to build and earn more value. This involves:

• Creating a distribution channel.
• Engaging with people to understand their problems.
• Building a product or service to address those problems.
• Selling the solution directly to the audience.

Welsh describes this path as “Hard as hell. Completely worth it.” He positions this method as his preferred way to “build, earn, and live.”

Sharing Insights for Aspiring Builders

For those interested in adopting a similar approach, Justin Welsh shares his insights through a weekly Saturday essay. This essay offers a single story or lesson focused on rethinking how individuals work, earn, and live. He notes that these essays are concise, require only 5 minutes to read, and do not involve marketing emails.

Welsh concludes by inviting readers to join his community of over 175,000 subscribers, providing a link for those interested in learning more about his philosophy on work and value creation.