Naval sees commoditization as market evolution—skills and businesses face survival pressures. When something becomes teachable, it becomes replaceable.
“Credentials become commoditized”. “Most set roles can be taught. If they can be taught like in a school, then eventually you’re gonna be competing with someone who’s got more recent knowledge, who’s been taught, and is coming in to replace you”. This follows natural laws: supply increases, prices fall through market forces.
Formal education becomes factory output. What can be systematized gets mass produced, erasing individual advantage. The authentic wisdom that matters cannot be credentialed—it emerges through repeated practice in real arenas.
The pattern extends beyond jobs into information markets. “News has become commoditized”. Before the internet, every town could support two local newspapers. Then CNN commoditized news with 24/7 broadcasts. The internet delivered “the final nail in the coffin”. Facts distribute instantly across platforms. “You go on Google News, you’re like, okay, watch a piece of news, which source and 3000 other articles”.
“You want to avoid repetitive drudgery—that’s just biding time until your job is automated away”
Programming systems accelerate replacement. “You’re much more likely to be doing a job that can be eventually replaced by a robot, or by an AI”. It doesn’t happen overnight—“it can be replaced a little bit at a time”. This gradual erosion destroys long-term wealth potential.
But mindless work versus mindful creation reveals the escape path. Build deep expertise that cannot be systematized. Creative expression becomes humanity’s last frontier. “Automation, over a long enough period of time, will replace every non-creative job or every non-creative work”. This creates genuine abundance—“all of our basic needs are taken care of”.
The defensive strategy: compound advantages that create protective moats. “You should try and get into a business where making Widget Number 12 is cheaper than making Widget Number 5”. This “builds up an automatic barrier to entry against competition and getting commoditized”. Brand equity becomes an economic fortress.
Naval’s survival instinct: never compete where winning means losing. Build intellectual property through authentic interests. The economic mathematics are clear—commoditized skills trade at replacement cost. Irreplaceable contributions command exponential returns. This is why skin in the game matters: true ownership cannot be commoditized.