The biggest secret on beating an industry monopoly.
Britannica, the most successful encyclopedia business for 244 years failed, not to World Book, but to the internet.
Yellow Cab, failed not because of their competitors, but (likely) to Uber / Lyft.
Walmart closed stores, not because of K-Mart / Sears, but because of Amazon.
Ted Levitt (the Harvard profession that coined the word ‘globalization’) says the railroads are failing because they think they’re in the railroad business, instead of the transportation business.
Phillip Morris isn’t losing to Kool or Camel, but to vaping.
Sometimes you can beat monopoly going head to head (Facebook vs Myspace, Walmart vs Sears, VHS vs Betamax).
But it may be easier / faster to beat a monopoly by competing out of their industry.
Sometimes these are the easiest wins because:
a) there’s not as many businesses competing with monopolies from outside the industry and
b) monopolies have become monopolies usually from being exceedingly focused on their competitors, and don’t see treats from outside the industry. There’s many stories like Walmart saying Amazon was a blip and was in a different industry than brick and mortar retail, UPS and FedEx have said Amazon Logistics is in a different industry (we don’t know what will happen here), Britannica said Microsoft’s desire to distribute the books on CD-ROM wasn’t their competitor.
Businesses that beat monopolies either start with a more specific customer, or a much broader one.
More specific:
1) Twitch took the gamer segment of YouTube
2) Facebook started with college kids only before expanding to compete directly with MySpace
Broader:
1) Railroads vs Transportation in general
2) Cab companies vs public transit / Uber
3) Wikipedia’s product was education for everyone vs Britannica that wanted to provide a product for the wealthy
If you’re looking to compete with a monopoly, the question becomes not so much “how can we be better” as much as it’s, “How can our market be more broad, or more specific, or what outside industry could we compete from?”
Why focusing on your goals makes some people lose.
People talk about success comes with hard work. Keeping your eye on the prize and the ultimate outcome. And the journey is more important than the destination.
These things might be true, but I think another way to rethink this into something more concrete is to consider what it takes to win the game you’re playing. It becomes good to consider 3 things:
1) What’s the game you’re playing,
2) What’s the end prize / goal,
3) What’s it take to start to win (this is the ‘journey’ part, and the biggest part that matters)
Jay Williams, a very successful college basketball player whom also played for the Chicago Bulls, talked about meeting LeBron James in the gym and tells the story of how LeBron was working out and practicing when Jay showed up on the day they met, and hours later after Jay was leaving the gym, he realized LeBron was still there working out. LeBron told Jay that he was there to prove that he was going to outwork him in every way and how Jay’s mere presence inspired LeBron to hit it even harder to prove it.
Who knows down deep why Jay wanted to play in the NBA – maybe fame, or fortune, or maybe he loved the sport and would have played even if there was no money in it. But to consider the 3 questions earlier, the answers may be:
1) Game is basketball
2) Prize is $4 million and fame
3) Journey is working out, practicing relentlessly, traveling often, not being able to eat poorly, not party a lot.
For some, the prize of $4 million starts to not seem so great if you’re away from your family, stressing out before every game, wearing your joints down and potentially having a crippling old age (eg. football players / boxers are definitely in this mix).
Want to make it big in corporate America? List the answers to the questions:
1) Game is corporate America
2) Prize is stable $80k income
3) Sucking up to bosses, dressing in uncomfortable clothing, traveling, 60 hour workweeks, firing bad employees, being a hated but effective boss.
The corporate America game isn’t the same for everyone, for both “what’s required” as well as “the prize” (eg. the prize may be fully monetary based, like if someone works at a hospital, they may like the money and the appreciation from healed patients).
People erroneously focus on the end goal and prize, and then wonder why they never make it. They blame it on not having enough willpower or motivation and conclude the problem is with them.
But the problem isn’t always the individual.
Whatever the prize is may not be worth it if the game isn’t worth playing.
How to properly become a selfish philanthropist
There’s studies that show that as people start to give their money or time away to some sort of charity that the money tends to come back to them even more so. There’s lots of “eerie” stories of random charity coming back (eg. giving $5 to a hobo and then finding a $20 on the street an hour later). But there also seems to be the side effects of charity, perhaps being at some charity dinner gets you to network with a) people doing well enough that can afford to give and b) people that don’t have a greedy mentality are likely better people to connect with. Charity seems more of the “standard” than “exception” for the mega-rich – Gates, Buffett, and Dell’s donations are in the multiple billions at this point.
What I’m more interested in is how it was on the rise. Did Gates give $100k when he made his first million? Bezos currently has over $100 billion and is known for not donating hardly anything (or at least not publicly – there are certainly anonymous donors that actually keep their mouth shut).
Gates didn’t start major donations until 2000, and there’s evidence that Andrew Carnegie started the whole “how much can you give away” competition with JP Morgan, John D Rockefeller and others shows that giving away funds tends to be something that’s done AFTER it’s accumulated. But interestingly enough Gates net worth increased $33B from 2000 (when he started donating a lot) to $92B in 2018. Interestingly, I can’t find any business leader that gave away significant funds and then later went and stayed bankrupt.
Poor people tend to be more generous – maybe this is just another reason they’re poor? Perhaps during a plane crash, you’ve got to put the air mask on yourself first and then help others.
We know:
1) Most mega rich people tend to be charitable
2) They tend to get wealthier during the periods of giving away money (Exception: Carnegie went from $475M to only $30M at death)
We don’t know:
1) If anyone that’s is a big donor today was donating on their rise to fortune
2) If there’s any correlation whatsoever with charity and future wealth
I believe there’s benefit in strategic (selfish?) charity that has an end goal.
If you play the lotto, you may win but if not, you fix schools in your state since that’s where most of the lotto money goes.
If you give to your friends that need money, they’re likely the most deserving people in your life.
If you give to your local shelter, it keeps dirty hobos off the street (and from mugging you) and makes your property values rise which will be great when you decide to sell.
If you give to local university, it may attract more students, which bring their parents money with them to help stimulate the local economy and support your vape shop business.
I think giving in a way where you expect nothing in return but can potentially see a way that it benefits more than just the recipient is an interesting way to consider charity.
The ultimate paradox: The lazier you are, the richer you are.
Relax your way to riches! You need to start realizing how the laziest people are the richest.
If you don’t know what the best business to get in is, someone else will tell you, but you’ll find yourself chasing your tail. I was reading a real estate investment book written by the successful Dave Van Horn, and noticed that he was always getting into something “better” throughout his career. He starts off buying houses with his own cash, fixing them himself, and selling them. Then realizes he can start to outsource more and more of his work. The lazier this guy gets, the richer he becomes. Consider the following sentiment and the wealth of each of these different levels:
Banks – Why do any work when we can just lend out the money to an investor?
Investors – Why repair the house myself and deal with all the headaches when I can just contract it out to a builder?
Builders / Syndicates – Why deal with the tenants for the houses we build when we can contract it out to a property management company?
Property Management Companies – Why do the repair work ourselves when we can contract it out to some local handy man services?
Construction Workers – Good thing I’ve got so much job security and they can’t outsource my work overseas! Back to work.
Meanwhile, the suppliers are behind the curtains, like when Levi Strauss said, “Why mine for gold when I can sell jeans needed for the miners?” – Levi wins whether miners find gold or not! Same mentality the lumber mills have towards the builders. “Why be the bank when we can get massive ROI as a mill?” Whomever said “money doesn’t grow on trees” never saw a P&L for a lumber yard!
But consider what all those ‘levels’ look like in regards to: the ROI (6% for a bank, but infinite for a worker that has to put in no money to get a paycheck), scalability (very scalable for a bank, not scalable at all for a worker), and stress / risk of each of those levels.
This post title was almost, “Get out of the business you’re in, because this is better.” There’s always something “better” if you don’t know how to define “better.” At the end of the day, if it pays the bills and you like doing it – keep doing what you’re doing.
Why knowing the difference between an Equinox vs a Solstice matters so much.
It doesn’t matter. That’s why.
And that’s why you likely we never fully understood the difference between the two things. When things don’t matter to us, it’s hard to learn. Obvious? Not really…
It matters deeply to someone about to take a test if they care about their grades though.
So when I mean it matters to you, I mean you need to show how it relates to you in daily life, not whether you think it’s “important.”
When you explain things to people, the more you can demonstrate on how a solstice* can affect them (eg. “You will experience longer days”) is far more powerful than it’s importance (eg. “You will pass this test.”) Some thing’s importance and it’s affectation are often correlated. But what’s crazy is that affectation can sometimes trump importance.
I hear you screaming now, “That’s not true, TruthCake! This site should be called FalseCake!”
Consider a couple facts:
“Sugar makes me feel good” is how it makes you feel, it’s affectation on you.
“Sugar will kill me.” is likely true, and that’s pretty damn important.
…then you gobble up that TruthCake.
*The difference between a equinox and a solstice. I’ll precede it by saying the exact dates change around, the angles of the sun are pointless to memorize (because they don’t affect you), and the names and locations of Tropic of Cancer and so on you’ll forget anyway. When I say “north”, I mean the northern hemisphere. So, here’s what matters:
Conclusion: There’s 2 solstices and 2 equinoxes in the year, and the type of solstice (summer vs winter) depends on the hemisphere you’re in on that day. The day after the longest day of the year (summer solstice), the days get shorter until they’re the shortest (winter solstice). Solstices affect you to tell you whether days are getting longer / shorter in your hemisphere. A long day for you means a short day for the south people, EXCEPT on 2 days a year, where the amount of daylight is equal to the south people, called an equinox.
Solstice Explanation: Earth goes around the sun in an oval orbit with its poles slanted relative to the sun. Half the yearly orbit, the north pole is pointed a bit towards the sun (which makes summer) and the other half, it’s pointed away (making winter). In the North, days are short in December because the North pole is tilted away from the sun, but in the South pole, the days are the longest. The shortest day in the North in 2018 is Dec 21 (the fancy term for it – “Winter Solstice”) but Dec 21 is also the longest day of the year in the South (“Summer Solstice”). Dec 21st is “Winter Solstice“ in the North, and that SAME day is “Summer Solstice” in the South. In the North, days get shorter right after the Summer Solstice until they’re the shortest (“Winter Solstice”) and the day after the Winter Solstice, the days get longer and longer until they’re longest (Summer Solstice), and the day after summer solstice, the days start getting shorter.
Equinox Explanation: There’s 2 solstices in a year (Winter or Summer), and indicate the longest or shortest day in the year. When the days are long for the north, they’re short for the south. So when a day is getting longer in the North (as we get towards summer and the summer solstice), it’s getting shorter for the South. Solstices are about 6 months apart because it takes about 12 months to spin around the sun. About 3 months after a Solstice (which is right in-between Winter and Summer Solstice dates), where the amount of daylight in the North is equal the amount of daylight in the South, these are called “Equinoxes.” I call them “who cares,” because my days are either always getting shorter or longer, and I know that from the solstice, but an equinox only matters if you care about your South pole brethren. If two people are running from opposite ends of the gym towards each other, the point where they meet in the middle is called the equinox, because they’re equally far away from the gym walls. If you were running in the gym by yourself, you wouldn’t care about the made up ‘gym equinox.’ You might call it a halfway point in the gym though, a point of no return where it’s farther to go back to the wall you started from than to continue on, or you’d probably just not care.
Statistics, stories, and death of the book summary
Statistics don’t seem to work well in the human mind, it has to create it’s own conclusion from the stories of something actually happening.
It’s far more powerful if I tell you 3 stories about how someone not wearing a seat belt all died vs saying “After surveying 1000 accidents, 95% of the time, seat belts save lives.” You’ll come to the conclusion more forcefully with 3 personal incidents than you will with the statistics in all likelihood.
This is somewhat of the same problem of book summaries that have impactful conclusions, where they usually have to lead up to the point by giving stories and/or research to hope you come to the same conclusion as them.
For example, The Sedona Method was a popular book with the subtitle: Your key to lasting happiness, success, peace and emotional well-being. And it takes 432 pages for them to really have a conclusion that says, “You’ll basically get over everything with enough time, right? Why not just get over it right now, since it’s sort of arbitrary when you’ll get over it anyway.” Even though that might be a bastardization of 400+ pages to summarize it in that, I’m basically right, but the problem is, it’s not impactful and you probably didn’t have your life change for the better like reading the actual book would do.
While I believe language is sloppy and inefficiently written often times and can be dramatically shortened while retaining 100% of its value, there’s some “magic” that book summaries lose that keeps most successful people talking about all the books they’ve read fully and NOT talking about all the book summaries they’ve skimmed.
Why learning from others mistakes doesn’t prevent us from making mistakes.
We see successful people all the time talking about the mistakes they made, and usually have a course to help you “avoid the mistakes they made.” But why do we see all these successful people talking about having made the mistakes to begin with? Was there no “home study course” back in their day for them to avoid mistakes? There likely were, and a lot of successful internet marketers like Frank Kern talk about buying courses from others, makes mistakes himself, and then Frank turns around to sell his course so you can avoid his mistakes.
You’re going to make mistakes. The difference is where you make those mistakes and how many of them you’ll make. That doesn’t mean you should have the conclusion Gary Vee has where he says to just stop listening to everyone and make your own mistakes. I agree with Tai Lopez’s and Warren Buffet’s idea that you can learn mistakes, and they don’t have to be your own mistakes – in essence, you can learn from other’s mistakes.
It seems like every major success story is riddled with mistakes, but those mistakes tend to be unique to them in that they learned from other’s lower level mistakes and didn’t do those.
What is this site?
Self improvement for smart people.
I follow business leaders, gurus, and philosophers and note things others missed that I’ve found valuable.
This site is my precious treasure chest of ideas on business, philosophy and life. And hopefully during your pillaging here, you get your mind blown.
My life’s goals are to help summarize the human knowledge base, dispel self improvement myths, and achieve a resultant and unrelenting state of 24/7 euphoria. I’m kidding, but we’ll still try!
Follow along on my journey!
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