1) Moats vs Many Players
So as Warren Buffet notes, moats are essential. Having a comparative advantage is key. What I see is that there are two sides of this debate however. One will note you should be the only player in the industry and that's the way to succeed. This is one I disagree with. It's fine if there are many players as that's a sign of a profitable industry, but you must have a distinguishing factor - why are customers choosing you?
2) Multiple Streams of Income
If you are a seasonal business, this is then a must. I personally don't like seasonal businesses because it's high risk, if your season doesn't pay off - you will perform poorly in that year.
Therefore, I like the concept of multiple streams, it's a great way to increase revenue and ultimately profits.
3) High Human Capital
Good employees are not easy to find. Especially those who are hungry to learn, smart and who are on the same mission as the company. Therefore, for a company to be successful, they should hire slowly and make sure they find the right fit. This is the same with firing, any hesitancy - it's best to fire fast - don't take any slack. Slack causes further slack.
4) AK Model growth
This is key. In the 20th century diminishing marginal returns to your capital was benevolent. The pervasiveness of technology has meant that this doesn't have to happen any more. Viewing your employees as human capital and continuing them to educate them is a great way to increase growth in your organisation. Another is the implementation of technology to assist efficiencies. An example is in the flower industry where plants grow via hydroponics. Technology through hydroponics has replaced all the soil and machinery needed for the old school way of planting.
5) Scalable buisnesses.
If your business has a cap, especially domestically, in my opinion it's not ambitious enough. Your idea should be something which can be scalable globally, and scalable quickly. You may have a first mover advantage product, and that is something you should be willing to take advantage of.
:max_bytes(150000):strip_icc()/GettyImages-907736222-5bd818fa46e0fb0051685a1b.jpg)
So as Warren Buffet notes, moats are essential. Having a comparative advantage is key. What I see is that there are two sides of this debate however. One will note you should be the only player in the industry and that's the way to succeed. This is one I disagree with. It's fine if there are many players as that's a sign of a profitable industry, but you must have a distinguishing factor - why are customers choosing you?
2) Multiple Streams of Income
If you are a seasonal business, this is then a must. I personally don't like seasonal businesses because it's high risk, if your season doesn't pay off - you will perform poorly in that year.
Therefore, I like the concept of multiple streams, it's a great way to increase revenue and ultimately profits.
3) High Human Capital
Good employees are not easy to find. Especially those who are hungry to learn, smart and who are on the same mission as the company. Therefore, for a company to be successful, they should hire slowly and make sure they find the right fit. This is the same with firing, any hesitancy - it's best to fire fast - don't take any slack. Slack causes further slack.
4) AK Model growth
This is key. In the 20th century diminishing marginal returns to your capital was benevolent. The pervasiveness of technology has meant that this doesn't have to happen any more. Viewing your employees as human capital and continuing them to educate them is a great way to increase growth in your organisation. Another is the implementation of technology to assist efficiencies. An example is in the flower industry where plants grow via hydroponics. Technology through hydroponics has replaced all the soil and machinery needed for the old school way of planting.
5) Scalable buisnesses.
If your business has a cap, especially domestically, in my opinion it's not ambitious enough. Your idea should be something which can be scalable globally, and scalable quickly. You may have a first mover advantage product, and that is something you should be willing to take advantage of.
Comments
Post a Comment