A walk through history reveals that massive wealth only came from a handful of strategies. These strategies were often illegal, unethical or unfair. A few centuries ago, it was common for us to murder our rivals, steal from them and make slaves of their children. Today, unless you are part of the mafia (or a perhaps an antiquated religion which collects money to alleviate our fear of original sin), illegal and unethical strategies are off the table. This leaves a few legitimate unfair strategies:
- Own property or stock that generates streams of cash. e.g. Trump, Buffet.
- Control a network. e.g. Telstra, railways.
- Have a legislated monopoly by being the only one. e.g. Doctors, Lawyers.
- Have a natural monopoly by being bigger. e.g. Amazon, Walmart.
- Find the worst place in the world to do business. e.g. Oligarchs in post-communist Russia or Mexico.
- Have people give you money belonging to future generations because you are an institution deemed ‘too big to fail’. e.g. Bank of America, General Motors.
Other unfair business advantages can be realized via increasing returns from scale, market share, IP or branding.
If your competitors were to talk about your business and say, “That’s not fair! They have Blank.” What is your Blank? If you don’t have a Blank, then real wealth may elude you. If you want to create a legitimate advantage, give us a call at HCG.