
Sustainable Sources of Competitive Advantage - joeyespo
http://www.collaborativefund.com/blog/sustainable-sources-of-competitive-advantage/
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a_d
I have been following Morgan Housel's (the OP) writings for a while. He has
written some excellent essays. In terms of explaining important ideas, they
come close to "PG-Level" (Paul Graham) in writing. If you are interested in
reading more from Morgan, I recommend the following:

1\. The greatest story ever told: "Capitalism’s success is built on a belief –
a story – that, given the right incentives, people can work together to solve
problems. It’s worked magnificently. It’s the greatest story ever told."

[http://www.collaborativefund.com/blog/the-greatest-story-
eve...](http://www.collaborativefund.com/blog/the-greatest-story-ever-told/)

2\. The Reasonable Formation of Unreasonable Things "Few things have as much
impact on your lifetime investment returns as the decisions you make during
bubbles."

[http://www.collaborativefund.com/blog/the-reasonable-
formati...](http://www.collaborativefund.com/blog/the-reasonable-formation-of-
unreasonable-things/)

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kenhwang
Isn't willingness to fail a way of learning faster? Willingness to wait was
also justified in terms of learning.

All the arguments seem to boil down to learn faster, adapt faster. Evolution's
a story as old as time.

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btrettel
How sustainable is having proprietary information? Assuming the information is
valuable today or will be in the future. I guess less so today than in the
past due to leaks and information spreading in general. But I am not certain
if this makes a practical difference. The willingness to fail and wait touch
on the value of having rare information.

See this blog post and the associated paper:
[https://www.schneier.com/blog/archives/2015/09/the_declining...](https://www.schneier.com/blog/archives/2015/09/the_declining_h.html)

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tw1010
Is there any way to express this advice in a more fundamental, perhaps more
abstract, framework? I often find more enlightening than off-hand advice
without any clear underlying structure.

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AznHisoka
Maybe there is no clean, abstract framework to express all this. Succeeding in
business isnt as simple as methodologically following steps 1 to 10.

On the other hand, I found this advice very succint and expressed elegantly.
“Be more empathetic than your competitors” is such an elegant idea and
captures the meme “Eat your own dog food and be your own customer” perfectly.

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TheOtherHobbes
The biggest and most successful companies show little evidence of empathy.

One of the most sustainable strategies is to create an oligopoly or de facto
monopoly [1], and then squeeze customers for cash as hard as you can.

You will eventually run out of lock-in, but you can have a very profitable
time before that happens.

A lot of people (me included) find this strategy morally objectionable, and of
course if you're a customer, it's a huge pain in the ass when you're on the
wrong side of it.

But as a business strategy it has obvious benefits. If you can create lock-in,
where are your customers going to go?

The reality is that today's business environment selects against empathy at
large scales. Making customers happy is fine for small scale service
providers, but beyond a certain size, it's far more effective to work hard to
eliminate customer choice.

You might wonder if business would work better if empathy was valued over cut-
throat monopolistic land grabbing. That's an interesting question, and it's
tempting to suspect that it would - not just in terms of customer
satisfaction, but in terms of technological stability and speed of innovation.

But that's not the business environment we have today.

[1] Ideally in a limited market, so there's no danger of formal antitrust
action.

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AznHisoka
Monopolies don’t interest me because I can never become one. There is little
practical value talking about how to become the next Time Warner or Verizon.

Becoming a popular “small” service is attainable however and it’s hard to
build a successful one unless you have empathy.

