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7 Powers: The Foundations of Business Strategy

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What are the secrets to making a company enduringly valuable? 7 Powers breaks fresh ground by constructing a comprehensive strategy toolset that is easy for you to learn, communicate and quickly apply. Drawing on his decades of experience as a business strategy advisor, active equity investor and Stanford University teacher, Hamilton Helmer develops from first principles a What are the secrets to making a company enduringly valuable? 7 Powers breaks fresh ground by constructing a comprehensive strategy toolset that is easy for you to learn, communicate and quickly apply. Drawing on his decades of experience as a business strategy advisor, active equity investor and Stanford University teacher, Hamilton Helmer develops from first principles a practical theory of Strategy rooted in the notion of Power, those conditions which create the potential for persistent differential returns. Using rich real-world examples, Helmer rigorously characterizes exactly what your business must achieve to create Power. And create Power it must, for without it your business is at risk. He explains why invention always comes first and then develops the Power Progression to enable you to target when your Power must be established: in the Origination, Take-Off or Stability phases of your business. Every business faces a do-or-die strategy moment: a crux directional choice made amidst swirling uncertainty. To get this right you need at your fingertips a real-time strategy compass to discern your true north. 7 Powers is that compass.


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What are the secrets to making a company enduringly valuable? 7 Powers breaks fresh ground by constructing a comprehensive strategy toolset that is easy for you to learn, communicate and quickly apply. Drawing on his decades of experience as a business strategy advisor, active equity investor and Stanford University teacher, Hamilton Helmer develops from first principles a What are the secrets to making a company enduringly valuable? 7 Powers breaks fresh ground by constructing a comprehensive strategy toolset that is easy for you to learn, communicate and quickly apply. Drawing on his decades of experience as a business strategy advisor, active equity investor and Stanford University teacher, Hamilton Helmer develops from first principles a practical theory of Strategy rooted in the notion of Power, those conditions which create the potential for persistent differential returns. Using rich real-world examples, Helmer rigorously characterizes exactly what your business must achieve to create Power. And create Power it must, for without it your business is at risk. He explains why invention always comes first and then develops the Power Progression to enable you to target when your Power must be established: in the Origination, Take-Off or Stability phases of your business. Every business faces a do-or-die strategy moment: a crux directional choice made amidst swirling uncertainty. To get this right you need at your fingertips a real-time strategy compass to discern your true north. 7 Powers is that compass.

30 review for 7 Powers: The Foundations of Business Strategy

  1. 4 out of 5

    Cedric Chin

    Quite possibly the only book about business strategy you ever need to read. This is miles better, and more practical than Rumelt or Porter, and it resolves for me some of the edge cases with Christensen’s disruption theory. It’s great.

  2. 4 out of 5

    Joshua Auerbach

    This book is a good starting point to think about business strategy, but has a few flaws and over-generalizations. My biggest personal annoyance that pervades the book is a conflicting view on markets that is never reconciled. In one chapter Helmer proclaims that passive etfs are superior to other forms of investing, but later posits that his methodology has allowed him to outperform the market. The examples are cherry-picked to fit a narrative and the book primarily focuses on all or nothing st This book is a good starting point to think about business strategy, but has a few flaws and over-generalizations. My biggest personal annoyance that pervades the book is a conflicting view on markets that is never reconciled. In one chapter Helmer proclaims that passive etfs are superior to other forms of investing, but later posits that his methodology has allowed him to outperform the market. The examples are cherry-picked to fit a narrative and the book primarily focuses on all or nothing strategies, with little discussion of tactics. The appendices proving the mathematics behind concepts such as economies of scale were largely unnecessary to explain business maxims. It provided good overarching themes and was a quick enjoyable read, but doesn’t offer any outside the box insights.

  3. 4 out of 5

    Vikrama Dhiman

    Mind-blowing Simply, the best book on Strategy and strategy. Pick it up. Read it once a year before the yearly planning.

  4. 5 out of 5

    Dickson Pau

    Awesome One of the best books on competitive advantages. More complete than Competition Demystified in my opinion. Love it that the author is a successful investor himself.

  5. 5 out of 5

    Lam

    Provide a totally new angle about strategy. Need to think much when reading this one. Will re-read this book for sure

  6. 5 out of 5

    Christopher Howarth

    I’m torn between the fact that the basic framework is pretty useful and the fact that the author’s tone and writing style is insufferably smug. We are treated to lengthy derivations of pretty straightforward formulas (the author can rearrange equations!) and a whole Appendix where the author investigates how successful his own investing experiences have been. At least I’ll give the author credit for making bold and falsifiable claims, e.g. that his framework is an exhaustive account of all the st I’m torn between the fact that the basic framework is pretty useful and the fact that the author’s tone and writing style is insufferably smug. We are treated to lengthy derivations of pretty straightforward formulas (the author can rearrange equations!) and a whole Appendix where the author investigates how successful his own investing experiences have been. At least I’ll give the author credit for making bold and falsifiable claims, e.g. that his framework is an exhaustive account of all the strategies available to business. If this is correct, this is very useful; if incorrect, at least the author opens himself up to be challenged.

  7. 4 out of 5

    Robert Martin

    This is the kind of book I had envisioned when people (especially technical folks like software engineers) make jokes about MBAs and their love of strategy books. There is a tonne of jargon and most of the book is spent reframing the world in the author's framework. This all sounds very critical but the truth is that I really enjoyed it. The 7 Powers is a digestible but comprehensive look at the subject of "competitive advantage" – value investors endlessly preach about the value of finding a moa This is the kind of book I had envisioned when people (especially technical folks like software engineers) make jokes about MBAs and their love of strategy books. There is a tonne of jargon and most of the book is spent reframing the world in the author's framework. This all sounds very critical but the truth is that I really enjoyed it. The 7 Powers is a digestible but comprehensive look at the subject of "competitive advantage" – value investors endlessly preach about the value of finding a moat (like Buffett's investment in Coca Cola due to its branding) but don't offer much advice in the way of characterising a moat. The 7 Powers details 7 ways in which a company can build durable differential margins, ranging from the obvious ones like Branding and Scale/Network Economies to more subtle factors like counter-positioning (Netflix) and process power (Toyota). Filled with tangible examples as well as sufficient generalisation as well as clear diagrams for future reference, the 7 Powers is clearly designed to be used practically. I came across this book while listening to Episode 174 of the Invest Like The Best podcast (Patrick O'Shaughnessy) and the concepts were interesting enough to warrant a read of the book. But if you don't have time to read the book, the podcast is a fantastic summary.

  8. 5 out of 5

    Vincent Chan

    What makes this book stand out from the others is its focus on using strategy to build a meaningful and lasting business, not just purely drive business growth. In the tech industry nowadays, people are so obsessed with product/market fit and try to drive growth via rapid optimization but there was not much discussion about what companies should do beyond product/market fit. Why some of those post P/M fit companies became great (10x) but some could barely survive (10%)? This book will tell you t What makes this book stand out from the others is its focus on using strategy to build a meaningful and lasting business, not just purely drive business growth. In the tech industry nowadays, people are so obsessed with product/market fit and try to drive growth via rapid optimization but there was not much discussion about what companies should do beyond product/market fit. Why some of those post P/M fit companies became great (10x) but some could barely survive (10%)? This book will tell you that a sound strategy can make the difference between an initial product/market fit being ephemeral versus the beginning of a significant and enduring business. It narrowly defines a successful strategy as creating a route to persistent differential returns for a business, giving people a new mental model for thinking about how to build a moat, especially for tech companies.

  9. 4 out of 5

    Jaime

    Business strategy condensed into an easy-to-remember framework. A "power" is what drives lasting dominance - it is the combination of a benefit, and a barrier that prevents a given competitor from attaining that benefit. Though there are many strategies that provide a benefit to a company, there are only a limited set that _also_ have a barrier sufficient to prevent a competitor from attaining that same benefit and therefore reducing profit margin through competitive arbitrage. The author descri Business strategy condensed into an easy-to-remember framework. A "power" is what drives lasting dominance - it is the combination of a benefit, and a barrier that prevents a given competitor from attaining that benefit. Though there are many strategies that provide a benefit to a company, there are only a limited set that _also_ have a barrier sufficient to prevent a competitor from attaining that same benefit and therefore reducing profit margin through competitive arbitrage. The author describes what he considers to be an exhaustive set of 7 potential powers: Scale, Network, Switching costs, Cornered resource, Counter-positioning, Process, Branding. I found both the framework and the explanation of each power to be compelling and have found myself trying to apply this framework to understand (or think of ways to improve) the business strategy of the company where I work.

  10. 5 out of 5

    Matthew

    4.5/5 stars. Excellent book on business strategy, particularly since it covered the topic through a novel lens. Helmer described each ‘power’ first with a case study of a company, then by describing the intricacies of it, and finally with a proof how each power drives continued excess profitability it in the chapter appendix. The mix of anecdotes and a mathematical derivation of how wielding each power gives a company the ability for excess profits (i.e. "alpha") made this book the whole package. 4.5/5 stars. Excellent book on business strategy, particularly since it covered the topic through a novel lens. Helmer described each ‘power’ first with a case study of a company, then by describing the intricacies of it, and finally with a proof how each power drives continued excess profitability it in the chapter appendix. The mix of anecdotes and a mathematical derivation of how wielding each power gives a company the ability for excess profits (i.e. "alpha") made this book the whole package. The author set out to be "simple but not simplistic." This book was not simple. It behooves you to brush up on your knowledge of mathematical logic and expand your vocabulary before picking up this title. I’d have given this book five stars if it was written in a way the reader could better find flow or if it was accessible to a wider audience.

  11. 4 out of 5

    Ben Van Horn

    For any business to succeed in the long term, they must have a durable business model. The notion of Power that Helmer writes about in this book is comprised of two aspects. A Benefit and a Barrier. The benefit is something that your company does that is highly valued or better than most of your competitors in your industry. A barrier is such that you have a position in the marketplace that cannot be arbitraged. Something that no other competitor can take away from you. Helmer shares a deep dive For any business to succeed in the long term, they must have a durable business model. The notion of Power that Helmer writes about in this book is comprised of two aspects. A Benefit and a Barrier. The benefit is something that your company does that is highly valued or better than most of your competitors in your industry. A barrier is such that you have a position in the marketplace that cannot be arbitraged. Something that no other competitor can take away from you. Helmer shares a deep dive in various powers from Branding, to Counter-Positioning, to Scale, and others by sharing examples of Intel, Netflix, and Pixar.

  12. 4 out of 5

    Lee

    Best business strategy book I’ve read, and it’s not close I’ve read most of the popular business, strategy, and investing books through my career as an investor thus far. While many of those texts are worth the time and effort, 7 Powers clearly stands alone as the most comprehensive and cogent work that intertwines business strategy with value creation. I could write quite a bit more about this book, but suffice to say, just buy it and read it (then read it again). It’s that good.

  13. 4 out of 5

    Valentine

    Read this in preparation for the Acquired.fm book club. I think it will be most useful as a kind of guidebook, a Hitchhiker's Guide to the Whiteboard if you will, for diagnosing different businesses and their strategies. I also think it'll be interesting to apply its principles to startups and side hustles that aren't your typical tech fare like Netflix or Intel et al. Also, the formula parts went way over my head. I should read a math book... Read this in preparation for the Acquired.fm book club. I think it will be most useful as a kind of guidebook, a Hitchhiker's Guide to the Whiteboard if you will, for diagnosing different businesses and their strategies. I also think it'll be interesting to apply its principles to startups and side hustles that aren't your typical tech fare like Netflix or Intel et al. Also, the formula parts went way over my head. I should read a math book...

  14. 4 out of 5

    Yechan

    At the end of the day, this book is basically Michael Porter x Bruce Greenwald with fancier language and more up-to-date case studies. Helmer does provide a better framework than these two professors did. However, attempting to create a simple framework, he often over-generalizes and uses quasi-mathematical formulas that seem contrived. Nonetheless, it is a book worth skimming through for those new to the concepts.

  15. 5 out of 5

    Yun Teng

    “Simple but not simplistic”. Framework for thinking about what makes a business last and how to get there. Was a relatively quick read with helpful charts but paused at parts to digest and apply learnings. Really liked the framework overall, was a new angle of evaluating businesses that I hadn’t seen before - some questions around generalizability of framework and clear distinction between the 7 powers, but overall still helpful

  16. 4 out of 5

    Lucas Watson

    The book gives an impressive and informative step by step walk through on how a business gains power and retains it. I understand Helmer’s goal in writing this was to denote the process of power in a “simple but not simplistic” way, however his language gets a little complicated in the appendixes of each chapter breaking down the mathematical expressions on how each power is formalized for the average reader thus the 4/5 star.

  17. 5 out of 5

    Gaurav Juneja

    Good framework for analysing business staretgy Very clear framework for determining the industry economics and competitive positioning of a business. Case studies are empirical evidence of the Powers in action. Specially suitable from looking at a business from the angle of an investor. Believe the equation / math stuff was not really needed / useful.

  18. 4 out of 5

    John

    I liked the book as a great short hand to think through what creates sustained, differentiated profits and at what point in the product life cycle each type of barrier or benefit is usually created. It's given me a few shorthand "rules of thumb" on questionable tactics based on either a product's maturity or a competitor's position. I liked the book as a great short hand to think through what creates sustained, differentiated profits and at what point in the product life cycle each type of barrier or benefit is usually created. It's given me a few shorthand "rules of thumb" on questionable tactics based on either a product's maturity or a competitor's position.

  19. 5 out of 5

    Bernard Leong

    The best business book that I have read so far this year. The only problem with Hamilton Helmer is that he did not read Clayton Christensen's 2nd book "The Innovator's Solution" that addresses his understanding of the innovator's dilemma. It's a book that I will re-read constantly similar to Robert Greene's "48 Laws of Power", "33 Strategies of War". The best business book that I have read so far this year. The only problem with Hamilton Helmer is that he did not read Clayton Christensen's 2nd book "The Innovator's Solution" that addresses his understanding of the innovator's dilemma. It's a book that I will re-read constantly similar to Robert Greene's "48 Laws of Power", "33 Strategies of War".

  20. 4 out of 5

    Chanh Nguyen

    Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat. 1. 1st principle thinking will lead to unbox the combination of resolution 2. Don't underestimate the not-to-do list 3. Avoiding stupidity is easier than seeking brilliance Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat. 1. 1st principle thinking will lead to unbox the combination of resolution 2. Don't underestimate the not-to-do list 3. Avoiding stupidity is easier than seeking brilliance

  21. 4 out of 5

    Govind Chandrasekhar

    I love books that help me solidify frameworks around seemingly amorphous concepts. This book did that for me with "Strategy". It draws on concepts (like network effects and scale economies) that are widely touted, along with some that are less popular (like counter-positioning) and brings them together into a tight framework. Useful for entrepreneurs/executives and for value investors. I love books that help me solidify frameworks around seemingly amorphous concepts. This book did that for me with "Strategy". It draws on concepts (like network effects and scale economies) that are widely touted, along with some that are less popular (like counter-positioning) and brings them together into a tight framework. Useful for entrepreneurs/executives and for value investors.

  22. 4 out of 5

    Israel

    Strategy can be complex and hard to boil down to practical terms. 7 Powers provides a framework that is easy to understand, apply and evaluate. It is especially useful for start-ups or relatively young companies. The short and concise chapters, coupled with tables & graphs make it a quick and memorable read.

  23. 4 out of 5

    Nate

    What unbearable garbage. The author may have good ideas, but I couldn't hang in there long enough to really find out. The writing itself is really terrible; it reads like it was written by a sociology student dropout. Ug. What unbearable garbage. The author may have good ideas, but I couldn't hang in there long enough to really find out. The writing itself is really terrible; it reads like it was written by a sociology student dropout. Ug.

  24. 4 out of 5

    Yu Zhou

    This book is incisive and practical. This book also reinforces a lot of business common senses. It does highlight the available destinies of companies. I think it could be useful compass to many people.

  25. 4 out of 5

    Tim Trefren

    Really, really interesting. Provides a framework for thinking about strategy that is simple enough to be memorable, but powerful enough to be useful. I appreciated the case studies on Netflix and Intel. Strongly recommend to anyone involved in business strategy.

  26. 4 out of 5

    Benedict Bleimschein

    i liked the book for what it is mainly about: the 7 types of power in business. well explained, good examples. Helmer only gets annoying when he starts bragging about making money using it for investing. Its simply not the topic of the book, no idea why that made its way into the book.

  27. 4 out of 5

    Shubham Kabra

    Fundamental book to understand strategy of any business. If you would like to understand why some businesses are successful and thriving, what strategic decision did they take to position them on top - it gives you fundamental principles to think about them. Brilliant read, hidden gem.

  28. 4 out of 5

    Jonathan Pancerman

    A great framework to hang a understanding of strategy on. Loved reading this and found myself nodding. Crystallized a lit of separate observations and thoughts I have come across and experienced with anecdotal, theoretical and detailed support. Highly digestible!

  29. 5 out of 5

    Edward Xiao

    A great and succinct book on business strategy that provides a simple but thorough framework. Specifically it helps one understand the paths businesses take to developing the enduring advantages that are so sought after by every business. Can't recommend the book enough, great read. A great and succinct book on business strategy that provides a simple but thorough framework. Specifically it helps one understand the paths businesses take to developing the enduring advantages that are so sought after by every business. Can't recommend the book enough, great read.

  30. 4 out of 5

    Wade Sarver

    Great guidelines Although difficult for me to follow at times and the formulas were a bit much, this book has some brilliant ideas. It proves to be a good guide to building a business and developing a strategy to grow. Great research inside.

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