David Perell - Favorite business frameworks

• Tags:: 🐦Tweets , Business
• Author:: David Perell
• Link:: https://twitter.com/david_perell/status/1488901012735684611?s=20&t=3qsB-xV8YA1gSsnlRelHjA
• Source date:: 2022-02-02
• Finished date:: 2022-02-06

Strong Culture, Fewer Rules

When a culture is tight-knit, people don’t need to be told what to do explicitly. They just copy what everybody else does, which allows them to be entrepreneurial.

But weak cultures need many precise rules to keep people in check.

(Source: Airbnb)

Christensen’s Disruptive Innovation Framework

Innovators win market share when they serve a segment of the market that is over-served by incumbents.

Startups offer the exact level of product or service they need and use this wedge to expand market share.

(Source: @SahilBloom)

The Boring-Sexy Matrix

If you want to start a highly profitable company, build highly differentiated products in markets without a lot of competition.

These products will tend to be boring, complex, and outside the media spotlight.

(Source: Charlie Songhurst)

Be an Arms Dealer

In a market craze with low barriers to entry and tons of participants, don’t pick winners.

Be an arms dealer instead.

Some examples:

1. Sell pickaxes in a gold rush.
2. Sell wine barrels instead of wine.

(Source: @wolfejosh)

Industry Matters

Small tweaks in positioning can have a large influence on profitability.

Say you want to play racket sports. If you want cash, choose tennis. A top-10 tennis player earns 10-20x more than a top 10 player in any other racket sport.

In business, choose software.[

Find your Secret

Peter Thiel says that great companies are a conspiracy to change the world.

They’re built on a secret that other people don’t yet understand. That secret unites people and creates a passionate and productive mission-driven culture.

https://twitter.com/david_perell/status/1158219181352980480?s=20&t=Kq47opouTwNVfl6fIfz3KQ

Build a Static Business

To reduce risk, don’t let any customer take up a huge portion of your revenue. It’s better to have a bunch of customers who pay roughly the same amount.

Done right, your customer revenue split will look like television static.

(Source: @JasonFried)[

Crossing the Adaptive Valley

When we make big changes in life, things often become worse in the short term.

Even if the mountaintop we’re moving towards is higher than where we’re standing, we often need to walk downhill in order to get there.

(Source: @EricRWeinstein)[

Table Selection

This idea comes from poker. Choose your opponents carefully and don’t compete against the best people.

You don’t need to get good at doing difficult things if get good at avoiding difficult things in the first place.

So if you want to win, pick an easy table.

Billboarding

A term for when the use of your product doubles as an advertisement.

Some examples:

1. Merchandise: People promote their favorite things.

2. “Sent from my iPhone” in an email signature.

3. Calendly: Sharing a link grows brand awareness.

(Source: @Julian)

Work Backwards

When developing new products at Amazon, Bezos tells people to start by writing a press release.

They ask questions like:
∙ What problem do we want to solve?
∙ Why is this product better?
∙ How can we tell our story?

Then they work backwards to a solution.

The Knife Theory of Hiring

When you first start a company, you need Swiss Army Knife people who can do a little bit of everything. Once your company gets big, you need a bunch of kitchen knife people who do one thing very, very well.