Interesting piece by Morgan Housel:
I often times get the sense that some of core building blocks of traditional economics, while still true today, require a non-trivial adaptation in order to still make sense in the context of the knowledge economy.
I’ve spent some time researching such concepts to some extent as part of the now-disbanded Evergreen collaborative research project, such as “competitive advantage” and its sister-term “barriers to entry”. The Wikipedia entry for the latter, for example, lists several sources of barrier to entry that are far less applicable in a knowledge economy.
The same holds true for competitive advantage.
Morgan’s piece creates an interesting adaptation of the competitive advantage idea, focusing less on physical sources that may generate it, and more on human mindsets that my help create it. It lists 5 such sources:
- The ability to learn faster than your competition
- The ability to empathize with customers more than your competition
- The ability to communicate more effectively than your competition
- The willingness to fail more than your competition
- The willingness to wait longer than your competition
Learning, empathy, communication, (lack of) fear of failure, patience — all seem like things that are much harder to imitate, compared to access to funding, tech or talent…