I cite my lack of “unfair advantages” as the reason why I quit my startup attempt. In this post, I’m sharing why you should care about your own unfair advantages and examples of them.
Why unfair advantages are important
Think of an unfair advantage like insider information. Insider information is when you have info that few other people have. The information is not public. Inside information is an unfair advantage that you have over the public. Because of its unfairness, trading public stock based on insider information is illegal in many countries.
When it comes to entrepreneurship, fairness is irrelevant. Don’t break the law of course, but also seek out your unfair advantages. Exploiting an unfair advantage like insider information might be illegal for trading, but exploiting an unfair advantage to start a company is a best practice.
The reason you should care about having unfair advantages is that having more and larger unfair advantages increases your chances for startup success.
Examples of unfair advantages
This list is not complete. I think it’s a good starting point though.
Domain expertise means you understand a particular market. You know how the customers think. You know how to sell to them. You understand the entire value chain. You understand the industry trends. You’ll be able to validate your market more easily.
Entrepreneurship is not for introverts. All other considerations equal, the extrovert will outperform the introvert. Knowing people and being able to meet more people are vital. You’ll have better distribution. Have a network and be able to expand it.
Credibility is the missing lean startup tactic. In fact, any professional network that you cultivate is predicated on credibility. People need a reason to take you seriously.
Famous people can get more done than ordinary un-famous people. I see very few reasons why being famous would hurt your startup attempt. My friend William, who runs Honey & Soul Paleo Goodies with his wife, says that all businesses ultimately reduce down to a people finding mission. Fame makes it much easier to find people and thus build a business.
Business sixth sense
This is a slightly more complicated unfair advantage. Allow me to take a moment to elaborate on “sixth sense.”
Chess is a common source of metaphor for me. In chess, when you’ve played enough games, you start recognizing certain patterns and positions on the chess board. Mental alerts will fire when you see your opponent’s queen opposite your king, when your opponent’s knight is within checking distance of your king, when your opponent castles the opposite direction from your own king. When you play enough bad games, you’ll associate certain signs with bad outcomes. You’ll recognize the patterns. Without much additional cognitive overhead, you’ll play to avoid those unfavorable positions.
Recognizing bad positions means you developed a sixth sense for chess. The same concept applies to business. Given enough mistakes, you start recognizing unfavorable positions. You’ll smell a bad market in a few days rather than a few weeks or months. You’ll know an ineffective cold email from an effective one before you send it. You’ll know a weak value proposition from a compelling one.
I almost called this unfair advantage “business acumen,” but that doesn’t capture the “you just can sense it” feeling that I’m after. Delegating your judgment to your intuition, to your sixth sense, means you save time avoiding bad positions as you would in chess. Most of my 9 biggest startup mistakes are symptoms of my poor business sixth sense.
With a modest programming background, I was fortunate in my startup attempt to have engineering as an afterthought rather than a bottleneck.
If you want to deliver a software product, you need to produce code. Code is complicated. If you can’t code but want to start up in tech, you better either learn to code or learn to sell good programmers on your idea.
Do you know why serial entrepreneurs are increasingly likely to succeed with each startup attempt? It’s because they gain more and more unfair advantages with each run.
At the beginning of my startup attempt, I had only engineering. I eventually developed a little bit of business sixth sense, domain expertise, and a network. However, it wasn’t enough. I need to keep learning, growing, and trying.
My goal is to develop more unfair advantages and strengthen my existing unfair advantages.
If you enjoyed this post or would like to give me any feedback at all, I'd love to hear from you! You can tweet me at @dillonforrest or email me at email@example.com. It'd make me super happy to hear from you!