Startup Buffettology Lesson #1: Knowledge Is King
I can’t remember what I paid for that first copy of The Intelligent Investor…Of all the investments I ever made, buying Ben’s book was the best.
I just sit in my office and read all day.
My job is essentially just corralling more and more and more facts and information, and occasionally seeing whether that leads to some action.
— Warren Buffett
This is lesson #1 in our “Startup Buffettology” series.
For the entrepreneur it means that sustained breakthrough results must be built on expertise.
You need to strive to be an expert at a core element of your business, you need to adopt a philosophy of continuous learning about your market (and there is always time for learning, as we explore further in the “Less Is More” lesson), and you need to build your business around this “core” of yours.
Obviously your core is determined by your pre-existing interests and passions.
Phil Knight was a wizard at marketing. Bill Gates was a software expert. Steve Jobs had a rare sense of design. Jeff Bezos is a systems virtuoso. They built their businesses around these skills, selected partners that complemented them, and formed habits of constant and voracious learning about their core skill and about the industries they were operating in.
If you’re a founder, your core should give you some signals about what you should be responsible for; what “department” you sit in, irrespective of whether you are called “CEO” or not.
This is at odds with much MBA teaching, where the personality and strengths of the founder are not considered as major inputs into the structure of the business. That may be fine for existing, stable businesses, but not for high-growth startups where the founder is the driving force.
You need to connect with what you have a natural flair for, work like hell at learning everything you can about it, and express the knowledge through how you structure and run your business.
Rule #5 in the book Strategy Rules by Cusumano has strong parallels with this.