The Optionality Engine
Create credible alternatives to strengthen bargaining power
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 4
- Confidence
- 94%
Daniel Priestley argues that the quality of an offer depends partly on the alternatives available to the person receiving it. A worker with one viable employer must tolerate that employer's terms, while a worker courted by several employers can choose among pay, conditions, and fit. The same mechanism can operate at community level: more small businesses create more places to work, and entrepreneurship education adds self-employment or a family business to the option set. The framework does not claim that everyone should become an entrepreneur. It asks decision-makers to increase the number of credible paths, then test whether competition among those paths improves bargaining power and quality of life.
Origin
Extracted from The Diary of a CEO
Core principles
- 01Bargaining power rises when a person has credible alternatives
- 02Competition among employers can improve pay and conditions
- 03Entrepreneurship can be taught as an option without requiring everyone to use it
How to run it
- 1
Map the current options
List the employers, income routes, or business paths that are genuinely available, not merely theoretically possible.
Pro tip Treat an option as credible only if the person could realistically take it.
Watch out A long list of inaccessible choices does not create bargaining power.
- 2
Find the concentration point
Identify where one employer, platform, or institution controls access to work or customers.
- 3
Add viable alternatives
Encourage additional employers, support small-business formation, or teach entrepreneurship as another route.
Pro tip Start with routes that fit the local skills and market.
Watch out Do not assume every person wants or is suited to business ownership.
- 4
Test the bargaining effect
Check whether the added options lead to better pay, conditions, mobility, or agency.
Watch out More businesses do not automatically produce better outcomes if all offer the same poor terms.
In the wild
Priestley contrasts a town dominated by one employer with a labour market in which ten companies want to hire the same person. In the first case, unemployment is the main alternative. In the second, employers must compete for the worker.
→ The worker can compare offers and negotiate from a stronger position.
Common mistakes
Confusing nominal choice with real choice
An option does not improve bargaining power if cost, location, skills, or access make it unusable.
Making entrepreneurship universal
The framework adds entrepreneurship to the menu; it does not require everyone to choose it.
Is it for you?
Best for
It is best for career planners, local economic programmes, and policies intended to increase worker choice.
Not ideal for
It is not sufficient where alternatives exist only on paper or workers cannot realistically move between them.
From the transcript
“When someone has lots of options, then they don't accept terrible conditions.”
“The most important thing in creating better quality of life is optionality.”
From the episode
Death of the Middle Class: Billionaire vs Entrepreneur DEBATE - Daniel Priestley v Nick Hanauer