Scarcity: What It Is, When to Use It, and What to Watch Out For...

It's hopeless...

I thought as I was 20 days into my 30-day Kickstarter campaign, but barely raised half of my $12,000 goal. 

How am I going to double the money with only half the time?!

I didn't know the answer, but the objective was crystal clear: 10 days, $6,000, and the fate of Willpowered hanging in the balance. 

At that moment, I became hyper-focused. 

I didn't have time to worry about things like sleep, fun, or even fear. My only concern was the mission and figuring out a way to achieve victory. 

This focus was so powerful that I didn't even need the 10 days...I reached the goal in 5. 

That is the power of scarcity. However, that power comes at a price.


Everyone reading this has probably faced a similar feeling of scarcity at some point in your life. 

It feels like another "you" takes over. One who tunes out all distractions, becomes super productive, and makes the most of scarce resources like time, money, employees, etc. 

Whatever scarce resource resonates most with you, the true measurement of scarcity isn't the lack of the resource itself, but the feeling that you don't have enough of it. 

A dieter and non-dieter may eat the same food, but only the dieter will feel as if it isn't enough. The same is true for money, time, or even friendships. 

You will not experience scarcity unless you feel it.


1. Focus:

The key factor of scarcity is how it heightens your focus. 

Beyond productivity, if you're gainfully employed and money is abundant, you don't need to focus on how much things cost. If you get fired, however, scarcity will be triggered and you will pay much closer attention to every expense.

2. Prioritization

Deriving from that focus, you will begin to prioritize much more effectively.

The unemployed will find what is worth spending her money on and cut back on excess.

The college student who consistently put off a semester-long project will suddenly find the discipline to say "no" to parties or TV binges when his deadline is imminent. 

These may become habits that stick with you even after the period of scarcity. 

3. Creativity

Often, focus and prioritization aren't enough to Get us through scarcity. So we need to find ways to use resources more effectively.

As I write this, I am using a feature called "Hemingway Mode" which does not allow me to delete any lines until my first draft is completed. 

I have a bad tendency of obsessing over each sentence, but because time is scarce for me, I need to focus on getting a rough draft done as efficiently as possible. Without that need to do more with less, I would waste countless hours continuing to obsess. 

Disadvantages of Scarcity

Until recently, I believed in scarcity so much that I deliberately put myself in situations to achieve more with less – like I did with the Kickstarter. It's helped me a lot, and I see it as one of my main goal-setting strategies.

Unfortunately, new scientific research has forced me to rethink that mindset. 

In their book Scarcity, Eldar Shafir and Sendhil Mullainathan illustrate how the advantages of scarcity can quickly turn negative – with serious consequences.

1. Mental Bandwidth

If you have been on a diet, you know how food suddenly becomes top of mind. 

You become overwhelmed with things like calories, carbs, meals, what you ate before, what you'll eat next, and what you need to do to justify indulging "just this once."

It is exhausting -- and now we know why. 

The process of thinking about the scarce resource of food takes up mental resources and inhibits your performance on other tasks the same way talking on a cell phone inhibits your performance while driving.

If your stomach is growling, and you are trying to hold out for hours until your next "allowed meal" you will not be as focused at work, on your kids, or anything else besides that food.

At best, this will make the process of dieting a lot harder on both yourself and those around you. At worst, this will lead to ironic rebound. 

2. Ironic Rebound

Notice in the first point how the dieter was spending their mental resources focusing on food? In other words, focusing on the very thing they are trying to avoid?

This is the ironic rebound effect. Scarcity heightens your focus on the scarce resource. This can help you use it more effectively, but it can backfire easily. 

Dieters can become more food obsessed.

Busy people can become disorganized. 

Lonely people can become desperate. 

When we become so focused that it becomes an obsession, we end up shooting ourselves in the foot. 

3. Tunnel Vision

As I read this book, I saw clearly how I displayed all these traits during times of scarcity. 

But why wasn't I aware of them until now? I pride myself on self-awareness, so how could I miss such obvious disadvantages?

Tunnel vision.

Again, the focus gained from scarcity causes you to dial in only on things that have to do with the object of scarcity.

During the Kickstarter...

I hardly exercised at all. 

I completely forgot about appointments I set with friends and family.

And any thoughts of the long-term consequences of my decisions became irrelevant. 

I only saw the goal and what I needed to do to reach it.

This tunnel vision goes beyond neglect; it can cause us to become downright foolish in our decision-making. 

If a student is unprepared for a big test tomorrow, an all-nighter seems like a good idea -- even though she will be in an even worse position without sleep.

When you need to pay a bill you can't afford today, a payday loan can look attractive. One creditor is demanding payment within the tunnel, and this new creditor is safely outside of it...for now. 

Before you think you are immune to the irrational decision-making of a college student or the cash-strapped, think back to the last time you justified skipping the gym, skipping your diet, or hitting the snooze. 

None of these decisions are rational, but they make sense when we our tunnel-vision is focused on our need for rest, food, and sleep.


What do I do now?!

I wasn't ready to give up on scarcity as a useful strategy, but clearly these disadvantages can't be ignored.

So how do we get the benefits without the negatives?

The answer lies in a story from World War II pilots who were so sleep deprived that they accidentally lifted the wheels of the plane upon landing, rather than the flaps, and crashed onto the runway.

This was especially prevalent amongst bomber pilots who were crashing twice as much as fighter pilots. The Air Force was baffled. 

Why are the bomber pilots making twice as many costly errors as fighter pilots?

The military suspected there must be something wrong with the pilots. So they immediately began work on training their pilots better, only recruiting the "best of the best," and demanding better quality education in America. 

One man, however, didn't examine the pilots, he examined the environment. 

He found that the controls of the two planes were very different --particularly the location of the control for the wheels . 

For the fighters, the wheels were deliberately placed away from the flaps. However, for the bombers, they were right next to each other!

Sleep deprived and exhausted, the bomber pilots accidentally pulled the wrong lever, lifted up the wheels, and crashed the plane. 

Once they fixed that flaw, the difference in crashes evaporated. 


Think about how hard it would've been for the Air Force to implement all of their strategies for "better pilots" for their planes.

They would need:

  1. Buy-in from training officers to adopt new plans.
  2. Support from Government officials
  3. New training of recruitment officers
  4. And a smaller pool of perfectly capable pilots to choose from. 

They would've spent countless weeks, months, or even years coming up with strategies and experiments to implement this plan and make their pilots "better." 

Yet, all they need to do was change one control of the cockpit. 

No buy-in, minimal funding, and once they did it, the problem was solved and they could focus their attention on much bigger issues. 


When we feel the pressures of scarcity, we typically blame ourselves for not being able to live up to the demands of the moment. 

We try to fix "the pilots," rather than the cockpit.

While there are obviously things that you can be doing better, it's likely that somewhere in your environment there is at least one "design flaw" that can be altered quickly, simply, and drastically improve your results. 

For example:

Keeping a food diary: Even without denying yourself any food, writing down what you eat works far better than a diet because food doesn't become scarce. You become smarter about your food choices, not obsessed with them. 

Apps/Tools: Apps and tools that can increase your productivity, self-awareness, or organization require time and money to set up. But that initial investment can give you the benefits for months or years to come.

Reading the Manual: It's so easy to neglect the value of acquiring skills and knowledge that will help you reach your goal. But if you take the time to learn about nutrition, exercise, how to use an app, etc. you will get infinitely better results. 

These are all examples of what I call the "One & Out Strategy".

They require you do something once to set yourself up for success. After which, you can let it out of your mind. 

This can be something as simple as dedicating part of your paycheck to savings before you even see it. Rather than depositing 10% of your income every paycheck, you make that one decision and don't need to worry about whether you're saving enough. 

Example from my life:

Getting out of bed in the morning is difficult –even for a morning person like me. So I bought Phillips Hue Lights and set them to turn on when my alarm goes off. And if I don't make it out in 10 minutes, they start blinking. 

It's a lot harder to go back to sleep in a bright room, and a lot easier to get out of bed with a rush of adrenaline when the lights start blinking. I bought those lights once, and now I will save hundreds of mornings of struggle to get out of bed. 

Whatever your goal, ask yourself: 

What change can I make to my environment once that will free my time, money, or mental bandwidth for months or years to come?


Playing with scarcity is playing with fire. 

It Isn't comfortable, it isn't fun, and it can also have some real consequences. However, the focus, prioritization, and creativity that you get from scarcity has made it one of the cornerstones of my philosophy.

To use scarcity to your advantage, you must find the things in your environment that you might neglect due to "tunnel-vision." See if there is something you can do once, ensure you're on top of it, and let it out of your mind.