Helmer: First-mover status is not synonymous with true strategic invention
Hamilton Helmer · 20VC: 7 Powers: The Foundations of Business Strategy: Deconstructing Economies of Scale, How To Assess True Market Size, Assessing Risk vs Uncertainty, What "Brand As Power" Really Means with Hamilton Helmer, Managing Partner and Chief Investment Offi · May 18, 2020 · at 14:43
Hamilton Helmer, author of 7 Powers, explains why early market entry does not equal strategic invention, drawing on the history of MySpace and Facebook.
0:00 / 0:18exact quote · 18.4s
720p mp4 · rendered on demand · StarZero watermark
“The fact that MySpace came before Facebook doesn't in the slightest in the way I think about creation diminish the creative act of all the things that Zuckerberg and others at Facebook have done to make Facebook a great company. So first mover and invention to me are not at all synonymous.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Hamilton Helmer
Helmer: Andy Grove's '10x better' product rule is a poor startup framework
“The 10 X came from Andy Grove, the CEO of Intel, and that's what he observed in the semiconductor was that for a generation to be different, it had to be 10 X. And in his space, that was probably a very reasonable empirical statement, but it is no guide in gen…”
Helmer: High confidence in market size estimates signals being too late
“My view is that if you can pretty carefully estimate your market size with great confidence, you're probably too late.”
Helmer: Building a true brand barrier takes at least 10 years
“How long? I don't know. At least 10 years, I'd say. Maybe it can be done in some cases shorter, but if it gets much shorter than that, you worry about whether there, in fact, is a barrier, because others can do it, and then it's no longer a source of power.”
Helmer: Strategy consultants are useless during high-uncertainty invention phases
“What I realized when I got very deeply into it was there's a crux moment in strategy where you sort of form the thing that develops your strategic source of power, if you will, and that that happens in areas of great uncertainty and on the fly, and then hiring…”
Helmer: Operational Excellence Cannot Save a Flawed Strategic Model
“So if you have an operationally incredibly effective company, you're very efficient, but you miss the strategy issue, then in the end, it won't be an attractive business model.”
Helmer: Business value equals strategic power multiplied by market size
“So remember that potential value is equal to power times market size, right? And power comes from the simultaneous satisfaction of a benefit. Something about your business makes you more money, you know, lower cost or higher prices. Plus a barrier so that othe…”