7 Powers: The Foundations of Business and also Career Strategy

In his seminal work "7 Powers: The Foundations of Business Strategy ," Hamilton Helmer provides a compelling framework for understanding what makes businesses sustainably successful. At its core, Helmer defines power as "the set of conditions creating the potential for persistent differential returns." This happens when two critical elements align: a significant value creation for customers, and a barrier that prevents competitors from eroding that value through competition.

For businesses, this framework helps explain why some companies consistently outperform their peers. Think of Microsoft's enduring dominance in operating systems, or Coca-Cola's century-long market leadership. These companies don't just create value; they've built moats that protect their ability to capture that value over time. The framework is particularly valuable because it focuses not just on competitive advantages but on truly durable ones.

But in today's rapidly evolving economy, individuals increasingly need to think like businesses. Reid Hoffman and Ben Casnocha's concept of "The Start-Up of You " argues that career success requires treating your skills and capabilities as a business venture. Just as companies need sustainable competitive advantages, professionals need to develop their own forms of power - capabilities and positions that create lasting value for employers or clients while being difficult for others to replicate.

Consider a senior software engineer who specializes in legacy system modernization. They create value by helping companies transition critical systems, but their power comes from the rare combination of understanding both old and new technologies - a barrier that takes years to replicate. Or think of a well-known industry analyst whose insights are valuable, but whose power stems from the network and reputation they've built over decades.

This parallel between corporate and individual power suggests that Helmer's framework, properly adapted, could provide valuable insights for career strategy. By understanding how each of the seven powers translates to individual careers, we can better navigate our professional development and build lasting career advantages in an increasingly competitive landscape.

While the parallels between corporate and individual powers are compelling, the differences between these contexts reveal interesting opportunities. Perhaps the most significant distinction lies in market efficiency. Corporate markets, especially in public equities, tend to be highly efficient - competitive advantages are quickly identified, analyzed, and attacked by rivals with substantial resources. In contrast, the job market exhibits persistent inefficiencies. Information asymmetries, geographic constraints, cultural factors, and the inherently personal nature of professional relationships create market frictions that can sustain individual powers for extended periods.

Consider how certain professional niches persist despite apparent economic incentives to compete them away. A specialist in cybersecurity might maintain premium rates for decades, even as the demand for her skills becomes apparent. This paradox exists because the barriers to entering such niches extend beyond mere technical knowledge - they include accumulated tacit knowledge, established trust relationships, and reputational elements that are remarkably difficult to replicate. Unlike corporate powers, which often face systematic assault from well-funded competitors, individual powers can remain protected by the inherent fragmentation and relationship-driven nature of professional markets. This characteristic suggests that individuals might actually have more opportunity than corporations to develop and maintain durable powers, provided they position themselves thoughtfully within these market inefficiencies.

Helmer's framework revolves around two core dimensions: Barrier and Benefit. The Barrier dimension addresses both the unwillingness and inability of competitors to challenge a position, while the Benefit dimension encompasses both cost advantages (?C) and value premiums (?V = P↑). These dimensions manifest across three phases - Origination, Takeoff, and Stability - and are influenced by factors like collateral damage, share gains, hysteresis, and fiat. Each of the seven powers represents a unique configuration of these dimensions, creating sustainable competitive advantages through different mechanisms.

For individuals, these dimensions translate differently. Barriers manifest as specialized expertise or unique relationships, while Benefits appear as both personal productivity gains and premium compensation potential. Unlike companies, individuals often benefit from market inefficiencies that make their barriers more durable. Here is a proposal for different powers individuals may cultivate and attain:

Counterpositioning

Counter-positioning, in Helmer's framework, occurs when an incumbent is unwilling to imitate a new approach because it would undermine their existing business. In individual careers, this power manifests through time allocation and learning investments. Junior professionals can exploit a unique counter-positioning advantage: their ability to deeply invest time in mastering emerging or niche areas that senior professionals, despite their experience, find difficult to prioritize due to their existing commitments and opportunity costs.

Consider the academic environment: PhD students can spend years deeply immersed in a narrow technical field or emerging research area, while their professors must balance multiple competing demands - teaching responsibilities, grant writing, department politics, and managing large research groups. The professors aren't unable to dive as deeply into these new areas - they're unwilling because their institutional roles and incentive structures demand their attention elsewhere. This creates a durable advantage for PhD students who can become world experts in highly specific domains, sometimes surpassing their advisors' knowledge in those particular areas.

This power also helps explain why some junior professionals can quickly rise to prominence in new technological domains or methodologies, even when competing against more experienced practitioners. The key is identifying areas where senior professionals' time constraints and existing commitments create a natural reluctance to deeply engage with new developments.

Cornered resource

Cornered resource, in Helmer's framework, refers to preferential access to a valuable asset. For individuals, this often manifests as mastery of hard-to-acquire technical skills or, more powerfully, unique combinations of skills that create distinct professional capabilities. While a single specialized skill can be valuable, the real power often lies in the intersection of multiple domains that creates a rare and difficult-to-replicate expertise.

In "The Start-Up of You," Hoffman emphasizes the importance of developing a competitive advantage through differentiation, which aligns well with Helmer's concept of cornered resource. He suggests that while broad skills are valuable, individuals should also develop "worthy expertise" - specialized knowledge or capabilities that make them uniquely valuable in the market. The key is finding the right balance: deep enough expertise to be distinctively valuable, while maintaining enough adaptability to evolve with market changes. For instance, someone who understands both quantum computing and high performance computing, or combines expertise in both machine learning and neuroscience, has cornered a resource position that's far more valuable than either individual skill alone.

In contrast to the corporate world, there are also skillsets that often command power that remains intact even when this power becomes highly apparent to outsiders. Perhaps the clearest definition of cornered resource is exemplified by this interview of Holden Karnofsky at the 80000 hours podcast :

> Holden Karnofsky: Yeah. I think the demand is crazily out ahead of the supply in security, which is another reason I wish more people had gone into it.

> You know, when Open Phil was looking for a [cyber]security hire, I’ve never seen such a hiring nightmare in my life. I asked one security professional, “Hey, will you keep an eye out for people we might be able to hire?” And this person actually laughed, and said, “What the heck? Everyone asks me that. Like, of course there’s no one for you to hire. All the good people have amazing jobs where they barely have to do any work, and they get paid a huge amount, and they have exciting jobs. I’m absolutely never going to come across someone who would be good for you to hire. But yeah, I’ll let you know. Hahaha.” That was like a conversation I had. That was kind of representative of our experience. It’s crazy.

Switching cost

Switching costs is perhaps one of the most important powers for individuals, but they operate bidirectionally, creating both opportunities and risks for professionals. From the employer's perspective, hiring represents a significant investment under uncertainty - the true productivity and fit of a candidate often only becomes apparent months after hiring. This information asymmetry, combined with onboarding costs and team dynamics, creates natural switching costs that can benefit established employees. Once a professional has proven their value and built internal relationships, employers often prefer to retain and develop them rather than risk hiring an unknown replacement. The key for individuals to profit from switching costs is often to select industries where scarcity of skilled talent will make each employee precious.

However, professionals face their own switching costs and uncertainties. Consider a bank teller with years of experience - while they've developed deep knowledge of their institution's processes and built customer relationships, their skills might not command a premium in an increasingly automated banking sector. The decision to switch careers carries significant risks: potential pay cuts during retraining, uncertainty about success in a new field, and the loss of accumulated seniority. These personal switching costs can create 'golden handcuffs,' potentially trapping individuals in declining roles or preventing beneficial career pivots. This highlights the importance of maintaining some career adaptability to ensure switching costs work for you rather than against you in the long term. This also the reason why powers described in previous sections are allowed to remain intact over time, even when they are widely acknowledged.

Scale economies

Scale economies in individual careers manifest most powerfully through the creation of zero or low-marginal-cost deliverables. Just as software companies benefit from near-zero costs of replicating their product, professionals who can package their expertise into scalable formats can dramatically increase their impact and earning potential. A software engineer who develops a widely-used library or framework can impact thousands of projects simultaneously. Similarly, a manager who develops effective systems and processes can often scale their influence across larger teams and organizations with minimal additional effort.

This power is particularly evident in the modern economy where knowledge work can be digitized and distributed. Consider how technical writers can reach millions through online courses, consultants can scale their methodologies through books and frameworks, or how certain individual developers can maintain critical open-source projects used by thousands of companies. This scalability often translates directly into compensation - companies are willing to pay premium salaries to professionals whose work can be leveraged across larger operations. The key is developing expertise or solutions that can be replicated without proportional increase in personal time investment, creating true economies of scale at an individual level.

Network effects

Network effects represent one of the most powerful advantages in individual careers, scaling in value with each meaningful connection added to one's professional ecosystem. As Reid Hoffman emphasizes, careers don't develop in isolation - they grow through a web of relationships that multiply opportunities, knowledge sharing, and professional development. Each new connection doesn't just add linearly to your network; it increases your access to opportunities, insights, and future connections.

This power operates at multiple scales. At the individual level, a strong professional network creates compound returns through referrals, insider knowledge of opportunities, and access to hidden job markets. At the geographic level, as Paul Graham observes in his "Cities and ambition " essay, certain locations create powerful network effects by concentrating ambitious people in specific industries - think tech in Silicon Valley, finance in New York, or entertainment in Los Angeles. These urban networks become self-reinforcing: talented people move there for opportunities, creating more opportunities, which attracts more talented people. This power can also be attained by joining specialized networks, or generalist networks such as LinkedIn or Nova , which again, open you up to otherwise inaccessible opportunities or connections.

Personal branding

Personal branding in professional careers is most powerful when anchored to concrete, verifiable achievements rather than mere self-promotion. The strongest form of personal brand emerges when an individual becomes inextricably linked to significant successes - whether it's a researcher known for breakthrough papers, an engineer associated with successful product launches, or a creative professional behind award-winning campaigns. This connection between individual and outcome creates a durable form of credibility that's hard to replicate.

The key to building this power lies in maintaining a visible track record of achievements. Researchers build their brand through publications and patents, which serve as permanent, citable proof of their contributions to their field. Software developers cultivate portfolios of open-source contributions or successful projects, demonstrating both their technical capabilities and their impact on real-world solutions. Creative professionals compile portfolios of client work and campaign results. These tangible records of success do more than document past achievements - they create a compounding effect where each success makes future opportunities more likely, establishing a self-reinforcing cycle of credibility and opportunity. Unlike more superficial forms of personal branding, this achievement-based reputation becomes a durable power that's difficult for others to contest or replicate.

Process power

Process power, which Helmer identifies as the rarest of the seven powers in corporate settings, translates to individual careers as the mastery of complex soft skills and management capabilities. Just as companies develop intricate operational processes that competitors struggle to replicate, individuals can build sophisticated personal systems for leadership, project management, time management, and decision-making. These capabilities, while less visible than technical skills, often become the key differentiators in senior roles.

The development of process power takes significant time and usually requires exposure to diverse challenging situations. This explains why companies often prioritize proven operational experience when hiring CEOs and senior executives - they're looking for individuals who have developed robust internal processes for handling complexity, making decisions under uncertainty, and orchestrating large teams. Unlike technical skills that can be taught in structured programs, these process capabilities typically emerge from years of practice, reflection, and refinement. The power becomes self-reinforcing: each new challenge handled successfully adds to the individual's repertoire of effective processes, making them increasingly valuable in handling future complex situations.

From statics to dynamics

Here's a draft discussing power attainment and development phases:

The development of individual powers follows distinct patterns that align with career stages and Helmer's phases of Origination, Takeoff, and Stability. Understanding these patterns can help professionals strategically develop their powers over time.

In early career stages (Origination), professionals are best positioned to develop counter-positioning and cornered resource powers. The ability to deeply invest time in emerging fields or niche specializations is strongest when opportunity costs are lower. This is also the time to begin building network effects by joining high-potential communities and locations, though these investments typically take years to fully mature.

During mid-career (Takeoff), professionals should focus on converting their early investments into sustainable advantages. Initial specializations can be combined in unique ways to strengthen cornered resource positions. Network effects begin compounding as professional relationships mature. Personal branding starts crystallizing around concrete achievements, and switching costs begin working in your favour as you prove your value to organizations. This is also when process power development accelerates, as you encounter and solve increasingly complex challenges.

Late career (Stability) is when several powers reach their peak potential. Process power becomes particularly valuable as management opportunities expand. Personal brand and network effects are fully mature, often making you a go-to person in your field. Scale economies become more accessible as you've developed expertise that can be leveraged across larger operations or packaged into scalable formats.

Importantly, power development isn't strictly sequential. Many professionals might be simultaneously developing multiple powers at different stages. For instance, while building process power in their current role, they might be using counter-positioning to invest in emerging technologies that their peers are overlooking. The key is recognizing which powers are most accessible and valuable at each career stage, and strategically investing in their development.