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It’s not just upbringing and hard work that determine entrepreneurial success. Harnessing your internal strengths and even converting adversity into opportunity are key, according to the compelling book The Unfair Advantage: How Startup Success Starts With You, by Ash Ali and Hasan Kubba.
Table 1 (image credit: YourStory)
Here are my takeaways from this must-read book, summarised as well in Table 1. Also see my reviews of the related books Quirky, Frugal Innovation, Straight Talk for Startups, The Creative Curve, The Introvert Entrepreneur, Shortcut Your Startup, and Master Growth Hacking.
The role of unfair advantage
Grit, perseverance, hustle, talent, passion, and discipline are certainly important for a startup’s success, along with its business model and teamwork. But life is not a pure meritocracy, and what also helps is having family wealth, connections, and education. This extends to the city of upbringing and even passport.
For example, white male American graduates from Ivy League colleges and working in Silicon Valley certainly have an ‘unfair’ advantage, the authors explain. Being in the right place at the right time with the right upbringing considerably helps with the luck factor.
Countries around the world have such pecking orders of privileges. As compared to the West, many emerging economies do not have advanced infrastructure with world-class education and health safety nets, the authors observe.
“An unfair advantage is a condition, asset or circumstance that puts you in a favourable business position,” the authors define. Some are unique to each individual, and can’t be controlled by oneself or copied by others.
‘Unfair’ is not to be confused with unethical or illegal, the authors clarify. It is something unique to each person that gives a competitive upper hand, and can exist even without having worked for it. A focus on unfair advantages helps to work smart and not just hard, it works the system and does not cheat the system.
“Your circumstances and unfair advantages, whether apparently positive or negative, can be double-edged swords,” the authors explain. Adversity can lead to depression or insecurity, but can also be framed for a path leading to opportunity. On the other hand, a wealthy background can also lead to smug superiority, arrogance or over-confidence.
The key is to map one’s circumstances, experiment to build a toolbox of talents, and do something that one enjoys and is valued by others, the authors emphasise. Hard work and luck are equally important to have, and require mindsets of growth as well as acceptance or gratitude. Unfair advantages multiply each other and accrue over time.
Unfair advantages and founders
A number of founders have effectively leveraged their unfair advantage, though these specific privileges may not have been highlighted as such in the media. Examples include Snapchat’s Evan Spiegel, who had wealthy well-connected parents, and an upbringing which helped build confidence and effective behaviour.
The authors emphasise that these founders certainly executed brilliantly on their insights. But also had lucky breaks which other aspiring founders may not have had.
The lesson for those who are not born into such privilege is to recognise these gaps and find ways to compensate for them, the authors explain. It also involves framing adversity into opportunity.
For example, Oprah Winfrey’s sense of compassion and empathy grew from her troubled childhood. Her family members also supported her outstanding reading and public speaking skills.
The authors themselves had challenges growing up in the UK as children of immigrant parents. Serial entrepreneur Ash Ali dropped out of college but lived with his parents and picked up internet skills during the dotcom boom. He launched a number of side projects, eventually becoming marketing director of Just Eat (which became a unicorn).
Hasan Kubba built a lifestyle business around a web marketing agency, learning from an ‘accountability partner’ along the way. Eventually, he was able to live off the ‘passive income’ from his SEO business.
“Your unfair advantage is your personal economic moat,” the authors explain. The unfair advantage of early-stage startups is the sum of the individual unfair advantages of the founders.
Thus, individual unfair advantages are like organisational competitive edges. Startups have the advantage of speed, fire in the belly, an ‘all in’ approach, and a ‘nothing to lose’ mindset.
Audit: the MILES framework
Based on their experience as entrepreneurs, investors and mentors, the authors present aspiring founders an audit framework to assess and act on their unfair advantages. The framework goes by the acronym MILES: money, intelligence/insight, location/luck, education/expertise, and status.
The framework helps founders understand their underlying motivations and mindset, which can evolve over time. They need to understand their personality along the dimensions of openness, curiosity, discipline, introversion/extroversion, friendliness, and ability to handle stress and worry. Complimentary skills and types can add balance to a founder team, the authors explain.
Founders need a combination of a growth mindset and realistic thinking (‘reality-growth mindset’), to know what limits to accept and boundaries to push. The authors compare this to theologian Reinhold Niebuhr’s ‘Serenity Prayer’.
Vision, resourcefulness, lifelong learning, and grit help in this regard. Founders like Jeff Bezos, Oprah Winfrey and Sara Blakely started with expansive visions for themselves.
“Many entrepreneurs did not have any kind of huge vision when they set up their company,” the authors also observe. Startups like Google grew and kept growing from their initial version as a side-project.
Money
On the money front, the authors advise founders to ensure they have a cushion or safety net, through savings, family contributions, freelancing, or side-projects. “Financial constraints can breed creativity, resourcefulness and ingenuity,” they suggest.
Intelligence and Insights
Formal education and IQ are not enough – founders also need social and emotional intelligence, intuition to judge character, and creativity. Intersectional and interdisciplinary thinking help connect trends and developments and devise unique solutions.
Driven by curiosity and experimentation, insights help find market needs and gaps, as seen in the success of Apple (design), Stripe (payments systems), Amazon (e-retail), and Google (monetising traffic). Domain expertise helps in this regard, but outsider perspectives can also be disruptive, the authors observe.
Location and Luck
Being in clusters like the Silicon Valley, Cambridge, Berlin, or Bengaluru helps through knowledge spillovers and availability of talent, meetups and capital. But costs and competition can be ferocious, and being away from such clusters offers other advantages, the authors explain. Nomadic entrepreneurs also work out of the famous ‘digital nomad hub’ of Bali.
Luck plays a big role in timing, as seen in the demise of companies that were way ahead of the times, eg. Palm Pilot. But early luck has also lead to over-confidence and one-hit wonders, the authors caution.
Being the first entails overheads of educating the market. Latecomers can become successful as well, eg. Google (search), Facebook (social media), DropBox (cloud storage), Spotify (online music), Amazon (ecommerce).
Education and Expertise
Good education offers unfair advantage through knowledge, networks and credentials. Expertise is self-taught and comes from experience, self-directed learning, and mentors. University-led clusters excel in specialised technical knowledge.
Status
“Status is your perceived ability to add value,” the authors explain. It is a form of social signalling in a hierarchical society. Status derives from economic, cultural and social capital, according to sociologist Pierre Bourdieu.
It is visible in assets, accent, dress code, hobbies, and tribes. The status is also derived internally from self-esteem and confidence, and leads to being regarded as trustworthy and engaging. All these are areas for self-improvement, the authors advise. One should acknowledge one’s circumstances, but neither be too humble nor brag too much, they caution.
Application: unfair advantages in action
The last section of the book describes the startup lifecycle, and how unfair advantages play roles in each phase. The first step is to understand one’s purpose, motivations, and definitions of success. This helps to choose which type of startup to launch: lifestyle (linear, niche, usually local) or hyper-growth (digital, venture-funded).
“Lifestyle startups are better if your unfair advantages are not so well-developed,” the authors advise. Hyper-growth startups require complementary strengths in the founding team, eg. tech, fundraising, visionary.
In the case of Apple, Steve Jobs was the visionary while Steve Wozniak was the technical co-founder. Eduardo Severin was a better networker and communicator than Facebook co-founder Mark Zuckerberg, the authors explain.
While ideas help get started, validation is key. “Beware of falling in love with your idea before you have any feedback from prospective customers or users,” the authors caution. Pragmatism, perfectionism and pride need to be balanced in product development.
A mindset of immersion in problems helps identify market opportunities and refine operations, eg. Will Shu and Deliveroo’s launch in Europe, Melanie Perkins’ launch of Canva to address problems in design software usage. Identifying unmet needs helps to stay ahead in the game.
Founder-product-market fit is key in this regard, according to Naval Ravikant, founder of AngelList. It builds on the founder’s unfair advantages.
Founders should expand the breadth and depth of their network in a focused manner. “The strength of your network increases the more you add value to it,” the authors explain. It calls for good listening, and being the first to offer help. Mentoring works well if founders are interested and willing to be coachable.
The book ends with advice on growth hacking, metrics, fundraising, and pitching. Funders want to see if founders understand what goes into growth forecasting even though plans may change. “Make sure you highlight your personal unfair advantages,” the authors advise.
“Unfair advantages are not static. They don’t exist eternally, they develop and change. You should always be asking what your unfair advantages are, both for yourself and your startup,” the authors sign off.
Edited by Kanishk Singh
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Link : https://yourstory.com/2020/09/unfair-advantage-entrepreneur-book-review
Author :- Madanmohan Rao ( )
September 09, 2020 at 07:00AM
YourStory