The Unfair Advantage: What Makes People and Companies Succeed and Others Fail

Business and Finance

Photograph: John Lau

Winning and losing and getting rich and bankrupt all revolves around the fine lines of success. As Barack Obama controversially puts it, “if you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen.” Although this speech did come off as rather stupid in gaining the votes of Americans, it perfectly highlights that life is never a level playing field: everyone is born innately or fostered with different strengths and weaknesses and we all have different circumstances that give us a competitive edge which others cannot replicate. But identifying our unfair advantage is the hard part: once we unlock that, we can fully realise our potential.

Take Bill Gates as an example - his unfair advantage stemmed from the competitive advantage of being educated in one of America’s top computer science schools. This fostered his love for code and algorithms, eventually leading to him founding Microsoft.

To discover our unfair advantages, authors have pointed to the M.I.L.E.S framework to aid entrepreneurs in gaining a better understanding of their motivations, intentions, plans, and mindsets, which can directly be altered to reflect one’s unfair advantage and therefore success in the market. The M.I.L.E.S framework discusses the notion of money in which the authors recommend that entrepreneurs have a financial buffer or safety net in place that allows businesses or people to gain some form of financial freedom while also being somewhat protected. However, they also tell us that “Financial constraints can breed creativity, resourcefulness, and ingenuity.” Understanding how to utilise this unfair advantage allows us to reap the rewards of what circumstances we are in now.

The second notion points to intelligence and insight such as formal education and IQ. Intelligence also includes that of social and emotional intelligence that ranges from character to creativity. But insight is also equally as crucial as it gives us crucial information to help companies identify customer needs and gaps. Outsider views can be disruptive, according to the authors, but domain expertise is valuable in this regard.

The third comment on this framework includes location and luck. The availability of expertise, meet-ups, and funding, as well as information spillovers, are all benefits of being in business friendly clusters such as Cambridge. But it often comes at the expense of fierce competition and increasing rent, which diverts and alters one's budget. Luck plays a huge role in timing, as shown by the failure of companies that were ahead of their time. Early success, however, can lead to overconfidence and one-hit wonders. Being first comes at a price in terms of business education. Latecomers like Google, for example, may also be famous.

The fourth is known as education and expertise. A good education provides an unfair advantage through knowledge, networks, and qualifications. Self-taught expertise is based on a mixture of experience, self-directed learning, and mentorship. Universities that lead clusters excel at advanced technical expertise.

Finally, the last letter falls onto the notion of status, also known as one's perceived ability to add value. It is a type of social signalling in a hierarchical society that can be derived from economic and social capital. This is reflected in the possessions and groups that we are associated with. Internally, status reflects self-confidence and conviction that gives off a sense of being trustworthy and engaging.

Understanding these fundamental concepts enables us to create a company that operates on a growth or rapid framework - one that is driven by Apple's growth rates, the people we want on our team, how we can set up regular day-to-day business transactions, and our network's understanding.