📚 Business Intro

My bucket list of things to learn keeps on growing and honestly sometimes I need an extra push to not just learn but also apply these acquired skills. This section contains post summarizing my learnings from different sources.

Assorted Learnings

Class 1

• Most of the companies fail not because they are not good at doing what they do, but because what they are doing is something nobody wants.
• 50% of the explanations you encounter in the real world are not really explanations, but mere redescription of question. Call people out for that.
• Average life expectancy of a company in S&P 500 is 12 years. The forces of entropy is coming after you.
• Perfect competition destroys you. If an industry has perfect competition, then all the surplus values goes to consumer and companies doesn't make a lot of profit.
• Best business people are always worried, but never stressed. Confidence without attitude.

Class 2

• Barrier to entry doesn't have to be high, but it should be hard to immmitate your business model.
• In Finland, if you get traffic ticket, your ticket will be 30% of your income.
• In stores, employees steal the most.
• It is hard for companies to be a mature and startup company at the same time because of mixed culture required.
• When you have to say no, don't just say you no but tell come back when you have.
• IT works in an environment where labor is expensive, but not where you have cheap labor. E.g. Walmart business model never work in China where there is cheap labor.
• Glassdoor's Best Places To Work are in "Pay to Play" business model.
• High Quality is all about perceptions, low cost is all about real costs. Reputation takes miles to attain, but lost soon.
• People who have knowledge work for percentage (%) of revenue, instead of salary.

Class 3

1. There are very few things in this world where only one entity is involved; otherwise most of the things happen when a lot of people are involved.
   • We just need to block only one entity in the chain.
   • To block a landline from CA to NY, you just need to break 1 mm of cable, and whole thing will break down.
2. If you are replaceable, you will be replaced. You need to add value to be irreplaceable. Think about what value you are adding to your study group, team, or friendship.
3. In life, you don't have to be good at everything. You just need to be good at one thing, and you can be average in all other fields.
4. If you have to pick drive left or right, which one would you pick? The one in which everyone is driving.
5. Wasp and Caterpillar: Wasps lay their eggs inside or on the caterpillar's body. When the wasp larvae hatch, they feed on the caterpillar, eventually killing it.
6. There are two types of entrepreneurs:
   1. One who are interested in maximizing their share of the pie.
   2. Others interested in increasing the size of overall pie.

Class 4

1. As a strategist, you need to think what outside factors can destroy your company.
2. You want to communicate to your competitors that your Variable Cost is low, so that they don't even think of competing. This is usually done by tricky financial accounting.
3. If you are gonna make other companies rich, make sure you are getting money. For example, HSC before building plants should have reached out to Coke, Pepsi suggesting that if we build these plants then artificial sweener's cost for Coke and Pepsi would be cheaper. They would have signed contracts with penalty before building.
4. 💡 You should always be looking at other job opportunities, otherwise your company will take you for granted. This is the only credible way your company gonna raise your money.
5. Irreversible actions are what counts.
6. ABC - Always be concerned / worried.

Class 5

1. MBAs are paid top money because of how they can come up with structured solutions to a complex problem. Being able to take insights from one solution to another.
2. Economics - process of making decisions in a world where there are limited resources.
3. Scarcist thing in your life is Time and Attention.
4. Interacting both inside and outside the market is expensive. Ultimately the size of the cost determines the cost of interacting.
5. When you are cutting costs, you are just pushing down your cost to somebody else. If you are not doing it, somebody else is doing it and you'd have to pay them. The only reason you outsource is the job doing by somebody else is better and cheaper.
6. Strategies
   1. Corporate [Horizontal] - Product scope question. Should startbuck coffee also be in tea business?
   2. Business -
   3. Industry [Vertical] - Scope decision. Where would you do business? What activities of value chain will you be doing?
7. MBAs: Always confident, sometimes right.
8. You can predict attrition and toxic people using just the communication data. Similarly you can look at successful product data.
9. There is always more money than ideas in America.

Class 6

1. There isn't a correct way to look at business problem.
2. If you can't beat your competitor, join them. Either preserve your exclusivity or become interoperable. E.g. When USB-C came out, a lot of existing devices were not compatible. However, companies took a gamble because they knew that with a small adapter people will switch to new devices.
   1. When you are trying to migrate people from one way to another, you need to provide a migration path.
   2. Back in old days, Lotus was super popular. Microsoft built Excel and copied all the Lotus's keyboard shortcuts so that people can easily migrate from Lotus to Excel. Similarly, Microsoft added support of opening Lotus files, making it easy for people to switch.
   3. Incumbent will try to block migration path.
   4. Microsoft created office's Macintosh version so that they can say that they are not monopoly.
3. Can you be flexible and commitment at the same time? No, but that's what you need to figure out.
4. Marriage is a lot like startup. Most startup fail and never make it to IPO. Wedding is like IPO. You are committed to solution to problem. You fall in love with problem but not solution. Persistent, Committed and Flexible.
5. Today's strategy comes out from figuring out how to respond quickly in response to new information.
6. Steve Jobs used to think independent app developers as parasites, while Android adopts it.
7. Platform is when you have distinct kind of customers. Both customers individually have no business but with your platform, a business transaction happens.
   1. Bank has borrowers and depositors - both customers.
   2. Newspaper has advertisers and readers - both customers.
   3. Uber and Lyft has drivers and riders - both customers.
   4. University is a platform. Customers - students, professors, donors, program office, company recruiters.
   5. I don't need to create a product to sell. I can sell other people's products on my platform.