7 Powers

A book about business strategy by Hamilton Helmer which outlines seven ‘powers’ that are the cause of successful companies. Usually you see a few of these elements working in concert. For example Pixar exhibits process power (developing computer generated films) and a cornered resource (writers, directors, and Steve Jobs).

The seven powers are:

  • Economies of scale
  • Counter positioning
  • Switching costs
  • Process power
  • Branding
  • Cornered resource
  • Advantages Accrue to the Leader

    Markets exhibit the Pareto principle in that most of the advantages accrue to a small number of players—mostly number one. These advantages include growing faster, network effects, recruiting the best people, expanding to new opportunities quickly and most of the 7 Powers.

  • How to Lose 10MM Dollars

    In a tweetstorm from Andrew Wilkinson about how their task list app Flow was out competed by Asana. To summarize, his team built an early SaaS task list web app that was growing fast until Asana arrived and quickly outpaced them. Their growth slowed and eventually decided to shut down after many years. He frames the underlying causes as bootsrapped vs venture backed and how, “Good product with great marketing beats amazing product with no marketing.”

  • Strategy Bugs

    Like software bugs, strategy bugs are a failure of understanding of how the real world and what you created. Also similarly, they have varying degrees of severity—some which should be solved right away and some which can slowly accumulate without significant harm.

  • Commoditization Increases the Importance of Distribution

    As products and services become commoditized, distribution and companies that help distribution become more important. Marketing and branding is one way to grow, but finding channel partners that already have a relationship with the target market is more effective.

  • Studio Ghibli

    Famed animated film studio that created such popular films as Spirited Away, My Neighbor Totoro, Princess Mononoke, and much more. Their films are often characterized by a magical or surreal nature and detailed, hand-drawn scenes that are visually stunning.