In a restaurant that is highly competitive, the owner may have to cut price and drop margin to stay in competition and attract customers, in turn they can only pay minimum wage to their employees.Think of the competitive advantage between monopolies versus perfect competition.Think of a British restaurant in Palo Alto, if they only consider their competition to be other British restaurants, than they may “dominate,” however in reality any other restaurant is realistically competition.Entrepreneurs are always biased to understate their completion.The fatal temptation is to define a market extremely narrowly so that you dominate it by definition.Non-monopolies tell the opposite lie: “We’re in a league of our own.”.Google, for example owns 68% of search engine traffic, however they hold themselves out as an “advertising” company to avoid scrutiny ” Think Facebook, Amazon, etc.They know that bragging about their great monopolies brings scrutiny.Most businesses will fall closer to one extreme than they often realize o Monopolies lie to protect themselves. Must think creatively to define new businesses and new offerings.If you want to create and capture lasting value, don’t build an undifferentiated commodity business.The single word for vertical progress is technology.If you take a typewriter and build 100 you have made horizontal progress.Horizontal or extensive progress means copying things that work.If you have a typewriter and build a word processor you have made vertical progress.Vertical process or intensive progress means doing new things.At the macro level, the single word for horizontal progress is globalization – taking things that work somewhere and making them work everywhere.“What important truth do very few people agree with you on?”.Zero to One by Peter Theil Book Notes and Takeaways via Duncan Kelm
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