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Hamilton Helmer

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73
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2024-05-05
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2024-05-05
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  1. “Yeah, so as I say, I'm an idea person and I'm about trying to empower company founders. And so the only thing I can say is, you know, read the book, spread the ideas, start your own company. Those are the things that would make me happy.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “At that time he is exiled from Florence and living in Rome and he had of this Roman community and a lot of his close friends had recently died or had difficulties. So he's at this inflection point in his life at 70, which in those days was very old. And yet he went on to do some of the most remarkable architecture in the history of the world. And so you've got to admire that sort of doing that, which is that rare second act. But I think for world leaders, Winston Churchill is very high. I'm a fan of Teddy Roosevelt, I must say, too, in this country.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “So, yeah. So I have some that I admire a great deal. I'm a tremendous fan of Winston Churchill's, you know, a quirky most really great people are quirky, you know. And he qualified. There are things you could say about him that you might have liked that so much. But he was a genius and at great fortitude, human sense, he understood things long before other people. I give him eye marks. Some of the great artists I admire enormously. I'm reading a book right now on sort of the last 20 years of Michelangelo, which is a wonderful book, actually, which is a very interesting period because in his first 70 years, he sort of finished up all that he wasn't going to do sculpture anymore. He just finished the last judgment, which was the wall of the Sistine Chapel, and I think the last major fresco he did. And a lot of his friends.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “One is what Clint East would advise to actors, which is don't just do something, stand there. And so there are a lot of things that are long-term-ish with kind of low signal-to-noise. And you can often just do a lot of stuff that you think makes a difference, but it really doesn't. And so that's one other one, which is somewhat more profound, I think, was one that I had a famous Sri Lankan journalist, was a mentor of mine and very dear friend, and he had a favorite expression that I adhere to all the time, which is everything is always about something else. And that's so true if you're dealing with this power stuff, one if you really dig down everything is always about something else.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Yeah, I'm a big believer in that. I mean, I think that sort of your place and how you connect to it has an important grounding effect. And before I talked earlier about creativity, and I think surrounding yourself in an environment that stimulates that is really important. And so I couldn't agree with him more”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “In my office just this last week, we actually put a Persian rug in our entry room. And this is what's called Farahan Saruk rug. And it's 150 years old. And it had an effect on me that I didn't expect, which is a work of great beauty. And it was before, it was all hand done, before machines. You get all this wonderful variation of the actual icons and the rug and the different dye colors. And I find that every morning when I walk in, I go, that's really beautiful. It's uplifting. And it shows you the importance of or the value of the quality of art. I mean, it kind of blows my mind, actually. So that's probably not the useful product discussion that you get.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “I'm a huge movie fan and have been all my life. And I'm particularly keen on animated films. But the movie that I've recently seen that I liked particularly was American fiction. I thought that was, it didn't make any of sort of the easy choices in a movie and as a result was just incredibly interesting and thoughtful, I thought.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “And he is an absolute luminous writer. I mean, it puts me to shame. I'm embarrassed when I read it because I think how pedestrian my writing is. And incredibly knowledge about the history of genetics. And I think that's such an important topic. So those are two that I would recommend, fairly wonky, but I like them both”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “One book that is extremely wonky, but, and I can only take it in very small doses, but is magnificent as one called The Road Reality by Roger Penrose, who's this brilliant mathematician. And it will be very daunting for anybody unless you're a deep math person. But his brilliance in Erudition just shined through in this thing. And it's just an amazing book. I would say there's another book, boy, I wish I could remember the name. Maybe you can get the name of the author, a book called Gene by this geneticist and I think Harvard Medical School professor that's about the history.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “I sort of alluded to it before, but just that remember. Action is the first principle of business. You do stuff. And my book is very oriented towards that. The ideal was not to tell you what to do, but to give you sort of guideposts while you're on that journey. And so I just people that are enthused about it. I encourage you to do stuff. You know, that's where it all starts. And I can think about it and maybe help a little bit, but it's mostly doing stuff.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, I mean, I am an optimist, really, in a way, you know, and I do, there's a famous Austrian and eventually American economist named Joseph Schumpeter who wrote this wonderful book, Theory of Economic Development, way back when, over 100 years ago, where he took the unusual view of saying that the vitality of an economy depended on entrepreneurs. And I ascribe to that. I think that creativity and action are the ways society and people advance. And I think the U.S. and a free society has huge advantages in that. And I think that I'm I feel very lucky to be in a place I'm in Silicon Valley, but to be in a place in a country where that is vital and active. And I think that's sort of ground zero for me. And so I think you see that alive and well, I think. There are people that are very enthusiastic about that. And as I am.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “So there are these two views about what's going on. One is that we're compensating for the normal inequities of capitalism and the other is that we're headed down a path to socialism and ruin. And that leads to a deadlock, which is you don't tax anymore and you don't cut spending. And that leads to deficits. And so anyway, a long, long rant, sorry, but that trend is extremely politically difficult to deal with and extremely threatening. And that concerns me immensely.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Analysis of inequality in the United States just came out much more robust analysis and has said that basically inequality in the last 60 years in the United States is unchanged. But that's post transfer, post-tax inequality, which basically says the amount of taxing and transfer and going on was about right. So it says that the amount we're spending is about right from that perspective. compensates for other inequities. And we should be spending that much. So we should tax more. And the other, the poster child for the other point of view of the dangers of government is the steadily increasing without interruption percentage of the economy that is government and to levels that 75 years ago people would have thought absolutely impossible.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Can go away. The thing, the underlying trend that people just can't get their arms around is entitlements and anybody who looks at the numbers can see that. Every economist knows that. But that's not an easy fix. And the reason it's not an easy fix is there are two opposing views of kind of what's going on. And there's no way to resolve those two views. One is that capitalism is rapacious and results in more and more inequality and the government has to do something about it. And the other is that the government is on a path that is creeping socialism that will undermine our freedom and economic sufficiency. And the poster child for the rapacious capitalism, one is, I don't know if you've seen the recent”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “And so that worries me a lot and it utterly will affect the idea of company founding because if you get into a crisis like that, it just the capital markets lock up and it gets very difficult to do anything. And to really stretch my credibility here, I'll opine on just how hard a problem this is to solve. The reason this is so difficult for this country to solve in other countries is that it is right at the crux of the delicate dance between capitalism and democracy. So if you think about the problem, of course, that's driving all this is entitlements. There's sort of discretionary spending, certain recovery programs and stuff.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Know, I nothing makes me think that the frequency will be a lot less. I don't know what it is, who knows? These are all uncertain events. But imagine if we got to one of those and we had no dry powder. And dry powder for us is the ability to heavily deficit spend, take on debt. Unfortunately, our government did that in both the financial crisis and in COVID. And because that people had jobs, my own view about the financial crisis is that if we hadn't done that, plus having been Bernanke as the head of the Fed, we would have gone into another Great Depression. It was that ugly. So this current debt trajectory, you don't know how long it will take.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Personally, I am very, very concerned about the Debt trajectory of the United States and many countries around the world, but I'll pick on the United States, but it's a trend going on everywhere. We're on a trajectory for this extremely high indebtedness. And so if you think about the last 30 years, right, there's been a crisis about once every 10 years. So there's the dot-com bust. There's the financial crisis. There was COVID.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “So I'd say they're right and I'm right, they're right because there are this incredible, I mean, business is really hard, right? And there are just a multitude of things you have to pay attention for. I'm right because all those things fall into those three categories. So it's an exhaustive set. And it's just, it simply comes out of the math, you know. So we're both right. I'd say.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Can and they can end up better than you. And so you're on a treadmill. And that's the way business is. That's fine. And if you stop running that treadmill, you get creamed. And so you got to do it. It's most of your day, but it's not power. And there are those rare cases where it's so material and so inimitable that it can be power, but they're rare.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Are there a lot of steps in doing that that they kind of know how to do with their staff is trained to do, but it's not documented necessarily and you can't imitate it. Yeah, then maybe they haven't. I don't know if they have process power or not, but it takes that level of complexity. In my book, I use the example of Toyota in a car manufacturing is complex enough that you can have this opacity in terms of material steps. But it's not common. And so if you're in a stability phase business, you're stuck with this funny thing, which is most of your day is on those issues. And it should be. Because if you don't do it, a competitor.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “There's some very tight considerations here or very demanding considerations for the unless they have to be material, but they also have to be opaque or some way people can't easily imitate them. Either they don't understand what's going on, or it might be opaque. So, for example, think of TSMC. So when they put up the latest fab, and get that operational.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “In a business one that we talked about before, when you're trying to attain competitive position, operational excellence is everything And so if you think of strategy not statically endpoints like Professor Porter was, but if you look dynamically how you get there, operational excellence is essential for a strategy. And so think of those things I mentioned before about Netflix, about their UI and recommendation engine and so on or international rollout, all those things. We were in a battle to get more subscribers than other people. And those were critical for that, right? But in themselves, they're critical in obtaining competitive position, but in themselves are not sources of power typically.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “One of the great thinkers and strategy was this Harvard professor Michael Porter and probably 40 years ago made the very controversial statement that operational excellence is not strategy. He got a lot of people of the Harvard Business School faculty really mad at him because that's what their careers were about. And it sounded like he was dissing them. But the point he was making was when you get to kind of this end state, if you already have power, that the things that drive operational excellence can be mimicked because you can hire a consulting firm who has best practices, knowledges to come in and get you up to snuff. You can hire people from your competitors who know how to do it better. And that's kind of true. But it's also true in this takeoff phase.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “You know, it's a great question. I'm always looking for it because if you find it, it probably means it's so obscure there would also be a great investment opportunity. We're looking all the time, but so far no, so far I'm pretty satisfied that seven isn't exhausted”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Companies got developed based on that. And it sort of feels kind of more like that to me, but it's very interesting. I could be wrong, but it feels different than crypto. It feels like there's more of a real ultimate use case. I mean, if it really is true what they say, that a 50% improvement in programming efficacy is not uncommon. Just that proposition alone is worth an awful lot of money if you think how many programmers are in the world.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Uses of this but requires incorporation, which is always troublesome. And so that's kind of my view. But there may be, there certainly will be businesses that couldn't exist without it, and there's some that are coming up, and some of those are, in fact, the businesses that empower the tertiary need. They're the ones that bring in. If you go back, this will date me, but if you go back into business history, back in, I guess it was the 90s, there was this thing called business process reengineering, you know, the idea that you would take computer sensibility into business processes, redesign them, and get these monstrous cost savings. And it was a gigantic consulting opportunity, right, for people, whole.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “You no longer had to have, you could have the power source at essentially at the operating unit of an operator. But that took a lot of redesign, incorporation, investment learning complements, all kinds of stuff. I tend to think this will be more like that. There will be some pure cases people will want to have them write their term paper with chat GPT or something. But if you think of businesses, it's hard for me to think of a single functional area in a business that with redesign couldn't benefit. So, you know, accounting, HR, R&D, all have”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “For semiconductors, it would be Microsoft. And then there are the companies that utilize the technology but have existed before and after. So for semiconductors would be automobiles. They use a ton of chips, but there were still cars before and after. And so I'm kind of of the view very much uncertain at this point that generative AI will its biggest impact will be that tertiary class. It will be used in a lot of things that existed before and exist after but are made better by it, like semiconductors and automobiles. And so it reminds me sort of, if you think of really big technology shifts like this, it reminds me sort of of electricity. When electricity came, you could completely reconfigure a factory floor, right?”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “If it learns about you and becomes a better psychiatrist or something, then that's a switching cost, right? So all these things are relevant to which business models will work. And I find that useful. But I think in general the way I think about it is it's sort of a standard form of potentially very powerful technology that is being introduced into the business world and just asking how that plays out. And I currently tend to think of that as sort of three types of plays. There's the company that's the technology play itself. So if you think of microprocessors, it would be Intel. There's the companies that wouldn't exist without the technology. So for micro.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “Yeah, it's a great question. I mean, we're all in this phase of wondering exactly how generative AI is going to play out. My own view currently, I don't see any change in Seven Powers from it in terms of an eighth power or something, but the issues that it brings up like scale economies, I mean, think of scale economies. If you have a fixed cost of trying to develop a model of a billion dollars or something or network effects, will AI models develop so that they learn in a way that for one user's interaction helps another user's interaction? That would be a powerful network economy. Or if it learns, if you think of”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “I sadly don't have the time. I do, I mean, I do often do, you know, fireside chats at company meetings and that kind of thing, but not a full-blown course. And I'm not teaching at Stanford anymore either. And so I don't. I enjoyed that immensely wonderful people to work with. But sadly, I don't have the time.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “Read the book and then have conversations with your colleagues about the topic because as you sort of internalize what that means and how have conversations with them about do we really have this kind of power? What's going on here? What's important? What isn't? Those conversations tend to allow you to sort of get a better grip on things. I mean, in the case of Netflix Reed actually had me come in and train the top 100 people in Netflix and strategy, I actually ran classes in the company. But that's unusual, I'd say. And I didn't have the book yet. And so I think the book gets people pretty far down that path already.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  33. “Whether you win that market share battle with the other contenders. And so you have a very, very important role at that point. And so I'd say the first thing to do with your question is to make sure you think about the different phases of this and then ask what those responsibilities are.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  34. “What are you facing? What you're facing is, remember that underneath all of this is change in technology. That's what made the product market fit possible in the first place. But that doesn't just stop. If you're a technology wave, often there are all kinds of offshoots, both for you and the compliments to your business and everything else going on at the same time. to win at that stability phase, which is really a market share win, you have to be aware of those and understand, okay, we have to incorporate this new feature, or maybe now things have gotten to the point where this new market segment is our product is attractive for it wasn't. This is meat and potato stuff for somebody at that level. And it may well be the decisive element in terms of”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  35. “So let's separate a business into three phases. You know, origination, takeoff, and stability. So the answers I've given are more in the stability phase. In the takeoff phase, let's say you've launched a product, you've gotten customer traction, now you're in a phase where there's just very rapid growth, probably other entrants like you.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  36. “So it's important in terms of just understanding their business to know what their source of power is because that can inform them about what it is that they're working for and also they may see things considered down in the weeds. They may see things that are important to that that they need to bring to other people's attentions because they're the ones that really have the knowledge of what that's going on. There's another aspect I mentioned before this idea of transforming, of starting up entirely new things. And usually, I wouldn't say usually I say it's not uncommon for ideas about that to bubble up from down below. And so that's another source.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  37. “Say there are a few, and it's a little bit different. You know, I'm not a great fan of the strategically driven organization because that idea, because it fuzzes over How this knowledge is useful at different stages in the business. And so for somebody in that position, say a product manager in an existing, successful business,”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  38. “Fighting blockbuster when Blockbuster finally threw in the towel and said, well, we darn well better do a malware DVD business. If you looked at the Blockbuster site, their UI site, you couldn't tell it different from Netflix. They just copied it. And so all that thoughtfulness about which things you put first and how you structure it and all that to make this suitable was mimicable. So that's an understanding of looking at the properties you have and trying to figure out if they're a castle or a shack.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  39. “But one of the tricks to understanding power is you have to have a pretty good understanding of why it's a castle and not a shack. So I'll give you a Netflix example. So a company I admire a lot. And I think if some of the things that they had to do to develop their business were so important for their business that don't guarantee a castle. So for example UI development, it's been an enormous amount of resources on trying to get just the very best UI. I mean, a zillion AB tests, all kinds of things, their recommendation engine everybody's kind of knows the story about how that went. Their interface with the content world and all this. Those things are important. There are things they have to spend a lot of time and resources on, but they can largely be mimicked. So when Netflix in an earlier phase,”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  40. “But there was a communication between Bill Gates and Warren Buffett where Warren Buffett was saying why he couldn't invest in microservices. He just didn't understand it, right? And so that meant he didn't, you know, the idea of network economies and what the moat was there. He didn't understand. So I think, but I think the concept of moat is a good one. The idea that you have something that gives you a refuge from a competing forces.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  41. “Power requires a benefit and a barrier, right? You have to have something that you do that gives you a better outcome than your competitors, lower cost or higher price. And then something that makes it impossible for somebody else to mimic that. So mode is the second. So it's not synonymous with power because you could have a mode around a very undesirable piece of property and wouldn't get you far. But I think it is pretty synonymous with barrier. I think Warren Buffett, Charlie Munger, who I admire enormously, I think get credit for sort of popularizing those concepts. And I think the way they think about it is good. I'd say that Seven Powers is...”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  42. “Yeah, it only works because there are modest scale economies. If there weren't any, then if they did all this stuff, they'd still have equivalency.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  43. “And then they've done interesting things like Uber Eats, where they've tried to utilize the platform that they have to get other opportunities for the one side of their platform, the drivers. And so if I had to guess, I'd say it was a well-played war of attrition with modest scale economies.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  44. “I'm not entirely sure. I'll take a guess, but take it as sort of an uninformed guess. I haven't really studied it carefully. I think that Over time, if I had to guess, I'd say they're probably modest scale economies in the business. And over time Uber has just very successfully played a war of attrition. And that's both been in how they run their business. They made one sort of initial misstep, which is they misdefined their business. They said it was international transportation and it's not that business is extremely geographically specific. You know, if you have a great position in the Bay Area, it doesn't help you in London. So their forays into China and everything really didn't make, but they pulled back on that focus down on understanding their source of power, which was a geographically specific scale economy.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  45. “Some modest network effects and any platform business would probably likely have some modest network effects. You asked me or you sent me about Uber and Lyft, I'd say that they probably have network effects involved, but not network economies”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  46. “Yeah, it's not an impact. It's a material impact. So it could have if it's a penny to your bottom line, that's one thing. If it's a billion dollars or something else.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  47. “Yeah, so for me, the difference is materiality is that whether the value benefit is large enough Engender a price delta significant enough to give you materially different margins into the future.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  48. “Yeah, kind of. I mean, I have called it a type of power. So for me, it's only those things which clear the significance barrier Hurdle rather that they're a large material, right? And so there are lots of things that I would say have network effects, but not network economies.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  49. “As you get more and more scale the percentage cost advantage of a fixed cost advantage like that goes down and that often. So that's a pretty frequent one that we see. We sort of laugh whenever we say we hear somebody say they have a flywheel, which kind of gives you the idea of network economies. There are often flywheels, ones that really are material are rare. The key thing here is materiality, not whether the flywheel exists, but whether the effect is strong enough to really tilt returns.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source

  50. “Mentioned before, people sometimes think they have branding power, but another one that I think I've heard you mention is people often think that they get scale economies through data. And I'd say that that's possible, but it's rare. And the reason it's rare is not because there aren't scale economies in data, but rather that the range of scale that the existing competitors have are often large enough to be able to put them in shouting distance of each other so that the differences in their cost per unit is not that great. The curve flattens, in other words, which is typical of any, because the most common scale economy is you've got a big fixed cost and you prorate that.”

    2024-05-05 · Lenny's Podcast · Business strategy with Hamilton Helmer (author of 7 Powers) · IDENTIFIED FROM THE TRANSCRIPT · source