The Four

The Hidden DNA of Amazon, Apple, Facebook, and Google

This week’s book summary is The Four by Scott Galloway.

Although I may not completely agree with Galloway’s perspective in this book, he provides a combination of solid research and cynical humor to paint a picture of how a few companies are reinventing the world as we know it. His detailed study of Amazon, Apple, Facebook, and Google show how these massive companies were formed, the market spaces they created, and the incredible societal and business impacts they have made and are making.

My takeaway from this book is Galloway’s “T Algorithm” which is his definition of the factors needed for a business to rise up and compete against The Four. The eight factors are:

Is Your Business Missing Out on Valuable Opportunities?

Microsoft, Amazon, Apple and Facebook get much of their value through the use of Multisided Platforms (MSPs).

MIT Sloan define a multisided platform as “technologies, products or services that create value primarily by enabling direct interactions between two or more customer or participant groups.” For example:

  • Apple connects app developers with iPhone users who have a need for the functionality that the app provides.
  • LinkedIn connects professionals, recruiters, and advertisers.
  • Microsoft uses Windows to connect users, third party app developers, and third party hardware manufacturers
  • Amazon and Alibaba connect sellers of products with a vast set of users that want to buy products.
  • AirBnB connects building owners with people needing to rent space.
  • Uber and Lyft connect drivers and passengers.
  • American Express, Visa, Paypal, and Square connect merchants to consumers.

MSPs are a very valuable and viable business model that creates value by reducing search or transaction costs for all participants.

Is your business leaving money on the table by not leveraging an MSP approach? Or, worse yet, are you leaving your business vulnerable to competition who have determined a unique MSP offering that threatens your existence?

What can you do to leverage the MSP strategy and how can you implement it in your business?

Differentiate or Die!

If you do not differentiate your business from your competitors, you are just another commodity! Being a commodity means that your products are no better than anyone else’s. This drives down your prices, erases profits, and eventually kills your business.

I wrote about what causes commoditization and how to avoid it in a post called Why Does Your Business Exist and Why Should We Care.

In this post Apple entered the MP3 market as a late comer. They were not the “first mover” and the market space already had a large number of competitors who competed on price. The market space was already commoditized.

Apple knew this but they understood that they could still dominate the space by clearly differentiating themselves from their competitors. They identified their key differentiators, measured themselves against their competitors, and realized that they were head and shoulders above the others. They entered the market and still dominate it today!

Boost Employee Productivity and Retention With One Tool

Recently I read The Alliance: Managing Talent in the Networked Age. Although I think the authors took a few too many chapters to explain their thoughts, I really did like the concept they titled “Tours of Duty.” A Tour of Duty is simply a formal or informal arrangement between an employee and employer. This arrangement defines the parameters of a work assignment that the employee will take on that will both develop their career and advance the company at the same time.

This is not a new concept by any means. It has existed in the military world for eons and I was introduced to it when I started in business back in the early 90’s. Essentially, it is an assignment with a defined term, expected personal development outcomes, and expected business outcomes. The employee is motivated to successfully execute the Tour of Duty so they can be promoted or get moved to a choice assignment, etc. (as defined by the agreement with their employer).. The business benefits because the employee is completely engaged in the process and is typically adding significant value to the business.

The authors of The Alliance specify three types of Tours of Duty

Communicate Your Brand Promise Like An Industry Leader

A few weeks ago I introduced a tool called the Business Compass. This tool provides the means of visually communicating your organization’s vision, mission, values, brand promise, leadership behaviors and strategic and operational priorities. I have previously blogged about vision, mission, values and strategic and operational priorities but what about Brand Promise?

Brand Promise is simply what the company promises to the people who interact with it. Companies that are able to follow through on their brand promise, create real brand value with their customers. This brand value can be measured in a number of different ways (see the Forbes article “Worlds Most Valuable Brands – Behind the Numbers” for one example) but essentially it comes down to how well known and respected the organization is and how much revenue this notoriety brings in. Forbes also rates the Valuable Brands with Apple, Microsoft and Coca-Cola right at the top of the list for last year.

The important thing to remember is that a brand isn’t what you say it is unless your corporate actions, services and products align with the brand promise. The litmus test for this is to ask your customers. They are the ultimate judge for a brand. Ask your customers what your organization means to them and you will get a excellent picture of what your brand is outside the walls of your organization.