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Hamilton Helmer is one of the world\u2019s leading experts on business strategy and the author of the seminal book 7 Powers: The Foundations of Business Strategy, which provides a comprehensive framework for understanding what it really takes to achieve and sustain a competitive advantage. With more than three decades of experience in the strategic consulting industry, Hamilton has advised over 200 companies\u2014from burgeoning startups to Fortune 100 giants\u2014on how to identify, build, and leverage their unique strategic powers. In our conversation, we discuss:

\u2022 Potential sources of power that startups should develop from an early stage

\u2022 Common misconceptions among companies about the types of power they possess

\u2022 How power relates to strategy

\u2022 The difference between a moat and a power

\u2022 Practical strategies for non-leaders to leverage insights about power and strategy in their work

\u2022 AI\u2019s impact on competitive advantages and barriers to entry

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Find the transcript and references at: https://www.lennysnewsletter.com/p/business-strategy-with-hamilton-helmer

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Where to find Hamilton Helmer:

\u2022 X: https://twitter.com/hamiltonhelmer

\u2022 LinkedIn: https://www.linkedin.com/in/hamilton-helmer-42983/

\u2022 Website: https://7powers.com/

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Where to find Lenny:

\u2022 Newsletter: https://www.lennysnewsletter.com

\u2022 X: https://twitter.com/lennysan

\u2022 LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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In this episode, we cover:

(00:00) Hamilton\u2019s background

(04:08) When power becomes important

(08:24) How strategy relates to power

(12:09) How power informs strategy

(14:46) The sequence of powers

(21:13) Common misconceptions

(24:39) Network effects vs. network economies

(26:58) Uber\u2019s success

(29:16) Moats vs. powers

(31:12) Strategies for non-leaders to leverage power and strategy

(37:51) Advice on how to become a strategic thinker

(39:27) AI\u2019s impact on the seven powers

(45:43) Why moving fast is not a power

(50:24) Three things that create value in a company

(51:16) The debt trajectory of the U.S.

(56:35) Optimism for the future

(59:25) Lightning round

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Referenced:

\u2022 7 Powers: The Foundations of Business Strategy: https://www.amazon.com/7-Powers-Foundations-Business-Strategy/dp/0998116319

\u2022 John von Neumann: https://en.wikipedia.org/wiki/John_von_Neumann

\u2022 Pearl Harbor: https://www.history.com/topics/world-war-ii/pearl-harbor

\u2022 Where the Japanese Went Wrong at Pearl Harbor: https://pearlharbor.org/blog/where-japanese-went-wrong-pearl-harbor/

\u2022 The \u20187 Powers\u2019 of business success\u2014from one of Netflix\u2019s early investors: https://www.qualitycompounders.com.au/post/the-7-powers-of-business-success-from-one-of-netflix-s-early-investors

\u2022 7 Powers: Foundations of Business Strategy (Key Takeaways): https://www.linkedin.com/pulse/7-powers-foundations-business-strategy-key-takeaways-nikita-maloo/

\u2022 Strategy Capital: https://strategycapital.com/

\u2022 Warren Buffett: https://www.forbes.com/profile/warren-buffett/

\u2022 Charlie Munger: https://www.forbes.com/profile/charles-munger/

\u2022 Poor Charlie\u2019s Almanack: The Essential Wit and Wisdom of Charles T. Munger: https://www.stripe.press/poor-charlies-almanack

\u2022 Bill Gates reveals why Warren Buffett was an invaluable source of support during the stormiest period of his career: https://www.businessinsider.com/bill-gates-interview-warren-buffett-support-microsoft-antitrust-lawsuit-2019-6

\u2022\xa0 Billionaire Warren Buffett\u2019s Secret Love Affair With Castles, Revealed: https://www.thestreet.com/opinion/billionaire-warren-buffett-s-secret-love-affair-with-castles-revealed-14290973

\u2022 Netflix didn\u2019t kill Blockbuster\u2014how Netflix almost lost the movie rental wars: https://www.cnbc.com/2020/09/22/how-netflix-almost-lost-the-movie-rental-wars-to-blockbuster.html

\u2022 Michael Porter on LinkedIn: https://www.linkedin.com/in/professorporter/

\u2022 What Is Strategy?: https://hbr.org/1996/11/what-is-strategy

\u2022 TSMC: https://www.tsmc.com/english

\u2022 Toyota Production System: https://en.wikipedia.org/wiki/Toyota_Production_System

\u2022 America will be left with \u2018severe, irreversible scars\u2019 if national debt goes unchecked. Now, a blockbuster report warns the bill is higher than believed, hitting $141T by 2054: https://fortune.com/2024/04/01/america-social-economic-scars-us-debt-gomes-price/

\u2022 Ben S. Bernanke: https://www.federalreservehistory.org/people/ben-s-bernanke

\u2022 Forty-four of 50 U.S. states worsen inequality with \u2018upside-down\u2019 taxes: https://www.theguardian.com/us-news/2024/jan/10/states-wealth-inequality-taxes

\u2022 Joseph A. Schumpeter: https://en.wikipedia.org/wiki/Joseph_Schumpeter

\u2022 Theory of Economic Development: https://www.amazon.com/Theory-Economic-Development-Science-Classics/dp/0878556982

\u2022 The Road to Reality: A Complete Guide to the Laws of the Universe: https://www.amazon.com/Road-Reality-Complete-Guide-Universe/dp/0679776311

\u2022 The Gene: An Intimate History: https://www.amazon.com/Gene-Intimate-History-Siddhartha-Mukherjee/dp/147673352X

\u2022 American Fiction on Prime Video: https://www.amazon.com/American-Fiction-Jeffrey-Wright/dp/B0CQKR72NX

\u2022 Farahan Sarouk rugs: https://nazmiyalantiquerugs.com/persian-sarouk-farahan-rugs/

\u2022 Rory Sutherland on LinkedIn: https://www.linkedin.com/in/rorysutherland

\u2022 Ogilvy: https://www.ogilvy.com/

\u2022 Clint Eastwood quote: https://www.brainyquote.com/quotes/clint_eastwood_168005

\u2022 Winston Churchill: https://en.wikipedia.org/wiki/Winston_Churchill

\u2022 Michelangelo, God\u2019s Architect: The Story of His Final Years and Greatest Masterpiece: https://www.amazon.com/Michelangelo-Gods-Architect-Greatest-Masterpiece/dp/0691195498

\u2022 The Last Judgment: https://en.wikipedia.org/wiki/The_Last_Judgment_(Michelangelo)

\u2022 Theodore Roosevelt: https://www.whitehouse.gov/about-the-white-house/presidents/theodore-roosevelt/

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Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

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Lenny may be an investor in the companies discussed.