The "7 Powers" By Hamilton Helmer, What They Are, And How You Can Fetching Build Them
The 7 Powers by Hamilton Helmer.
Deep book.
Very useful information for building a business that?wins.
You want that right?
I know you do.
Let's get started.
Definition of Power (And Other)
I am a mathematician. Definitions are my lifeblood. Questions are my strength. Behold, our definitions:
The Mantra is what the book is trying to teach you. My goal is to teach it to you as well, but with less words. This is gonna be tough.
7 Powers
Our first question:?What are the different forms of power?
Each power has a benefit provided to the wielder and a barrier that prevents an opponent from claiming that power.
I'll be describing each power, along with its benefit and barrier.
1. Scale Economies
A business in which per unit cost declines as production volume increases.
Examples: Costco wins.
Benefits: You pay less, and get more! Barriers: Gotta have that monies.
2. Network Economies
A business in which the value realized by a customer increases as the installed base (of users) increases.
Examples: Facebook is for your grandma, X and LI are winning.
Benefits: Charge more because everyone is on you (the platform not you the person). Barriers: Hard to get that critical mass of peoples.
3. Counter-Positioning
A newcomer adopts a new, superior business model which the incumbent does not mimic due to anticipated damage to their existing business.
Example: OpenAI is a?beast. They just released GPTs. Boom.
Benefits: You are superior. Barriers: The opponent decides to?not?be superior.
4. Switching Costs
The prohibitive cost to swap from one supplier to another gives power to the supplier.
Examples: SAP, Salesforce.
Benefits: You charge higher prices because they have them by the throat. Barriers: The opponent must pay the switching cost.
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5. Branding
People know you.
Examples: Alex Hormozi, Andrew Tate.
Benefits: People trust you. Barriers: It takes time to get people to trust you at scale.
6. Cornered Resource
Unfettered access to "coveted" resources.
Examples: Steve Jobs, monopolies.
Benefits: You have all the things in one spot. Barriers: The opponent must get all the things in one spot. This might be impossible, or the cost might be prohibitive.
7. Process Power
Company processes (that can only be matched by extended commitment) are so gorgeously fine tuned that they lower costs and create a superior, unrivaled product.
Examples: Toyota. I think Tesla is getting there.
Benefits: You spend less, and still make a better product than everyone else. Barriers: It takes a fetching?long?time to optimize processes to this degree across complex systems. GM was never able to copy Toyota, even though Toyota was incredibly transparent about what they did.
How To Get There
Now that you know what the different forms of power are, the next step is to determine how to acquire power.
This is broken down into two questions
What must you do? Know the forms of power. Be creative and invent things that get you closer to those forms of power.
A mantra from the book that Dickie Bush also uses: "You can't steer a stationary ship."
Be in motion.
The direct path to power is?"unknowable"?which isn't super promising for you and I.
When can you do it? There are three phases of business described in the book and each phase lends itself well to the creation of a different type of power:
I'll let you decide where you're at and what you can do.
My argument for entrepreneurs out there: branding has gotten far more important in recent years, and this book doesn't reflect that.
As Naval Ravikant has said: "Soon everyone will be part of the creator economy."
And that's?all?branding, audience building.
Wrapup
What I find fascinating about this book is that I can combine it with knowledge from other individuals to create a clearer path?to build power?in my business.
For example, if you take this book's information and combine it with
you have a pretty good map to win in almost any business.