Week 217

Positive post Sunday, April 18, 2021- Week 217. 

I decided to shift gears this week and focus on a business topic for my entrepreneur friends.  Many of us in the business world are familiar with the importance of creating a competitive advantage to differentiate our product or service from others.  There has been much written on this topic, but have you ever thought about competitive advantage having a shelf life?  Afterall, all our competitors, and new market entrants, are also searching for competitive advantages as rigorously as we are.

This made me think about how a business or entrepreneur can create a “sustainable” competitive advantage.  While researching this, I found an article written by Morgan Housel on July 3, 2017 titled Sustainable Sources of Competitive Advantage.  Here’s the link: Sustainable Sources of Competitive Advantage · Collaborative Fund.

Housel profiles the following 5 sustainable sources of competitive advantage:

• Learn faster than your competition.
• Empathize with customers more than your competition.
• Communicate more effectively than your competition.
• Be willing to fail more than your competition.
• Wait longer than your competition.

Housel notes that creating sustainable sources of competitive advantage might be the most important topic in business and investing because other than luck it is the only path to long-term success.  He also suggests that other sources of perceived competitive advantage like intelligence, design and insight, are not sustainable as our competitors are almost certainly as smart and creative as us.

Housel’s article was written back in 2017, and we have now surpassed the 1-year mark of the onset of the pandemic in the United States.  This makes me think about how his article applies to today’s businesses in these unprecedented times.  The implications of the pandemic have forced many businesses to close while others have emerged.  Which of these new businesses will adopt Housel’s 5 sustainable sources of sustainable competitive advantage and survive beyond the pandemic and prosper into the future?

Sustainable Sources of Competitive Advantage is one topic on a list of articles in Housel’s broader writing titled, Ideas That Changed My Life.  A few other articles include: Everyone Belongs to a Tribe and Underestimates How Influential That Tribe is on Their Thinking, Multi-discipline Learning, and Self-interest Can Lead People to Believe and Justify Nearly Anything.  Should you be interested in delving deeper into this, here’s the link to the broader articles: https://click.convertkit-mail4.com/d0uzwp2vn7h0h6g037fl/8ghqhohg265l9ock/aHR0cHM6Ly93d3cuY29sbGFib3JhdGl2ZWZ1bmQuY29tL2Jsb2cvaWRlYXMtdGhhdC1jaGFuZ2VkLW15LWxpZmUv.

How can you apply Housel’s 5 sustainable sources of competitive advantage to your business or investing?

What businesses have/will emerge from the pandemic?  Which ones will be sustainable?