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17 results for “defensibility”
Concept4 mentions across episodes
defensibility
So here's an interesting question. What is the definition of a competitive advantage? You know, if you say emote, and turns out that Porter himself never really defined it. And so we argue that a competitive advantage should have two features. One is
24:39 / 26:02
from transcript24:39 – 26:02
we analyze what it is about a business that enables it to achieve persistent differential returns, or to put it another way, to be way more profitable than their closest competitor and do so sustainably. And this is adapted from a framework that Hami
3:14:58 / 3:16:03
from transcript3:14:58 – 3:16:03
Not to mention, these were abstract concepts. I mean, you read them and they click. And you're like, oh, yeah. Competitive strategy by Michael Porter. This totally innately makes sense. But then that next level of literally measure So the thing is I
23:58 / 25:23
from transcript23:58 – 25:23
and, obviously, the infrastructure to reach people, you know, through the digital devices, primarily their their smartphones, there's enormous potential to build very, very large, highly profitable businesses. Totally agree. Doing more with less and
12:46 / 13:55
from transcript12:46 – 13:55
And to illustrate this, let's say a technology enabled product is something like Redfin, where there's lots of ways they can apply technology to make the process better. But at the end of the day, it's a traditional brokerage with a person who's show
36:42 / 37:50
from transcript36:42 – 37:50
...defensibility moat, concept. But it but it's also it's like it has to provide a benefit to customers and a barrier to competition of all types from coming in and eating your lunch. And so the seven he's identified are counter positioning, scale econo
1:09:01 / 1:10:05
from transcript1:09:01 – 1:10:05
yes against technology enabled businesses because they can tech enable just as easy as these new entrants can start tech enabled. Not just as easily, but it's possible to compete on that vector. But when it's a pure technology product that's being so
37:18 / 38:32
from transcript37:18 – 38:32
and take advantage of cloud native things. And it's like, the old tricks are the new tricks. Now you're the incumbent, and you're finding way to do margin expansion. And the mindset a decade ago or almost two decades ago at this point of, oh, we need
2:06:45 / 2:07:48
from transcript2:06:45 – 2:07:48
So the first part of analysis is a section called power, which we have shamelessly ripped from Hamilton Helmer's book, seven powers. The question is, what is it about any given business that allows them to achieve persistent differential returns or t
3:10:30 / 3:11:30
from transcript3:10:30 – 3:11:30
than a company that's at a 12% ROIC that might be stagnant over that period of time and not growing. So there's a huge advantage to to getting that correct. There's a lot of other ways that people talk about moats. Buffett talked about brands when he
15:05 / 16:23
from transcript15:05 – 16:23
segment that we're gonna do in our analysis here is power, which is adapted from Hamilton Helmer's seven powers book, which is an amazing framework for business strategy. The question here is, what is it that enables the business to achieve persisten
2:10:21 / 2:11:30
from transcript2:10:21 – 2:11:30
mantra. But the one exception to this is probably the world of infrastructure. And, you know, as you look at the energy transition and the trillions of dollars that are gonna need to go into Mhmm. Either the build out of the data center infrastructur
10:33 / 11:37
from transcript10:33 – 11:37
can earn outsized profits versus all of their competitors. It's basically what what's the thing that makes your business powerful versus your competitors. And I think this really gets at the core, David, of, like, what and why we wanna dissect what t
1:25:27 / 1:26:30
from transcript1:25:27 – 1:26:30
...which he defines as long term differential profit margins versus your competitors, as we've been talking about on the whole show. Yep. The seven that he identifies are counter positioning, scale economies, switching costs, network economies, process
1:52:30 / 1:53:36
from transcript1:52:30 – 1:53:36
And it could have aligned with power had their execution been better, but it was a failed opportunity, unfortunately. This will really date me, but I remember when IBM entered the PC business, Apple took out a a full page ad and what was it? The Wall
41:12 / 42:17
from transcript41:12 – 42:17
the acquisition price of a customer, it's not priced properly, and so it's a good time to get customers. And later on, you sort of can tighten the screws a little bit. Well, like, I the YouTube example is interesting. Right? Like, in their case, dial
43:22 / 44:52
from transcript43:22 – 44:52
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