Biggest leaps in progress are vertical, not horizontal
Vertical progress is what it takes to go from zero to one. So, create technology or idea in the first place. Apple did this with iPhone in 2007 and changed the way we see and use phones altogether.
Ask yourself novel and challenging questions like:
- Can people live on the moon?
- Is a world without cars possible?
- Will we be able to fully live off renewable energies?
Monopolies are good, for both business and society
Monopoly means one company is doing something so much better than the rest. They’re doing so exceptional at this that simply no one else can survive. Think about Google search algorithm and Microsoft Windows.
We all should shoot our ventures for monopoly.
Characteristics of Monopoly
- Proprietary Technology (e.g. Google, Cisco)
- Network effects (e.g. Facebook, Twitter, Viber)
- Economies of Scale (e.g. Grab, Uber, AirBNB)
- Branding (e.g. Apple)
Building a Monopoly
- Start small
- Monopolize a niche
- Scale up
- Don’t disrupt (avoid competition as much as possible)
Founders need a ‘Vision’
Take a look at Paypal’s vision. Paypal will give citizens worldwide more direct control over their currencies than they ever had before. A mouthful? Sure! Too good to be true? Of course. But he was right. His vision of the future showed an entirely different reality than the one he lived in and the drive he instilled in himself and his team is exactly what led them to creating the future they imagined.
So shoot for the moon. Even if you miss, you might end up among the stars.
7 Questions You Must Answer before Starting Any Business:
- Engineering/Technolgy question
- Can I create breakthrough technology instead of incremental improvements? (10x instead of 2x 3x …)
- Timing Question
- Is now the right time to start my business?
- Monopoly Question
- Am I starting with a big share of a small market (high competition)?
- People Question
- Do I have the right team?
- Distribution Question
- Do I have a way to not just create also deliver my products?
- Durability Question
- Will my market position be defensible for 10 – 20 years?
- Secret Question
- Have I identified a unique opportunity that others don’t see?
DCFs of low and high growth startups are on opposite ends of the spectrum.
Most of the value of low-growth atom-startups is in near term (night clubs, restaurants). Bit-companies follow opposite trajectory. They often lose money for the first few years as it takes time to build valuable things. That means delayed revenue. Most tech companies’ value will come in at least 10 or 15 years in the future.
Advertising doesn’t exist to make people buy a product right away.
Advertising exists to embed subtle impressions that will drive sales later.