The greatest profits in resource transitions come not from trading the scarce resource but from enabling substitution.
Functional Alternative Development
Successful substitution focuses on function, not form. What does the resource do, and what else could do it?
Roger's functional analysis framework: 1. Identify core function of scarce resource 2. Map all possible functional alternatives 3. Evaluate barriers to substitution 4. Develop solutions removing barriers 5. Scale rapidly during scarcity window
When plastic feedstocks became scarce, he didn't seek other plastics. He identified packaging functions and developed paper-based alternatives that outperformed plastics in key applications.
Waste-to-Resource Transformation
Scarcity transforms waste into valuable resources. What was garbage during abundance becomes goldmine during shortage.
Linda specialized in waste transformation: - Construction waste → Recycled building materials - Food waste → Protein alternatives - Electronic waste → Rare metal recovery - Agricultural waste → Biofuel feedstock - Textile waste → Insulation material
Her facilities, unprofitable during resource abundance, generated extraordinary returns during scarcity periods.
Efficiency Innovation Acceleration
Scarcity drives efficiency innovations that reduce resource needs. These innovations often persist beyond the scarcity period.
Carlos built efficiency solutions: - Water scarcity → Precision irrigation systems - Energy constraints → Waste heat recovery - Metal shortage → Additive manufacturing - Land limits → Vertical farming systems - Bandwidth scarcity → Compression algorithms
His technologies, developed for scarcity, maintained value through efficiency gains even when abundance returned.