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Other animals are instinctively driven to build things like dams or honeycombs, but we are the only ones that can invent new things and better ways of making them. Humans don’t decide what to build by making choices from some cosmic catalog of options given in advance; instead, by creating new technologies, we rewrite the plan of the world.
But what makes the future distinctive and important isn’t that it hasn’t happened yet, but rather that it will be a time when the world looks different from today.
My own answer to the contrarian question is that most people think the future of the world will be defined by globalization, but the truth is that technology matters more.
it’s hard to develop new things in big organizations, and it’s even harder to do it by yourself.
In the most dysfunctional organizations, signaling that work is being done becomes a better strategy for career advancement than actually doing work (if this describes your company, you should quit now).
Positively defined, a startup is the largest group of people you can convince of a plan to build a different future.
“Madness is rare in individuals—but in groups, parties, nations, and ages it is the rule,”
if you want to create and capture lasting value, don’t build an undifferentiated commodity business.
Monopolists can afford to think about things other than making money; non-monopolists can’t. In perfect competition, a business is so focused on today’s margins that it can’t possibly plan for a long-term future. Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits.
Monopoly is therefore not a pathology or an exception. Monopoly is the condition of every successful business.
Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past.
But a great business is defined by its ability to generate cash flows in the future.
Simply stated, the value of a business today is the sum of all the money it will make in the future.
Every monopoly is unique, but they usually share some combination of the following characteristics: proprietary technology, network effects, economies of scale, and branding.
As a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage.
A good startup should have the potential for great scale built into its first design.
Brand, scale, network effects, and technology in some combination define a monopoly; but to get them to work, you need to choose your market carefully and expand deliberately.
The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.
Once you create and dominate a niche market, then you should gradually expand into related and slightly broader markets.
At no point does anyone in the chain know what to do with money in the real economy. But in an indefinite world, people actually prefer unlimited optionality; money is more valuable than anything you could possibly do with it. Only in a definite future is money a means to an end, not the end itself.
