Sharing notes from the book ‘The Four: The Hidden DNA of Amazon, Apple, Facebook and Google’ by Scott Galloway.

If one were to wear an analytical hat, one can use these attributes as pointers in studying business models. If one is an entrepreneur, then one can try to incorporate these. Although it mentions Trillion $, it doesn’t have to be a trillion $.

Attributes of the next trillion $ Company:

  1. Product differentiation:
    1. It can happen in various forms:
      1. Where Consumer discovers the product
      2. how they buy it
      3. the product itself
      4. how it is delivered
    2. Worthy exercise is to map out the value chain of your product or service from the origin of the materials through its  manufacture, retail, usage, and disposal . . . and identify where technology can add value, or remove pain, from the process/experience.
    3. You’ll find that this value can affect every step—and if you happen to spot a step where it hasn’t, start a new company there. Amazon is adding technology and billions to the fulfillment segment of the consumer experience that will likely create the most valuable firm in the world.
    4. Before Amazon, ordering from Williams-Sonoma meant you would pay $34.95 to get the product in a week. Now it’s free in two days or less. The most mundane part of the supply chain ended up being the most valuable in the history of business.
    5. Removal: Remove pain points
  2. Visionary Capital: 
    1. To build a business of that kind one requires to invest heavily without profitability for a long time. It’s important to have patient capital backing the venture.
    2. Attract cheap capital by articulating bold vision that is easy to understand. Google – organising the world’s information. Facebook – Connecting the World
    3. As J Crew Chairman Mickey Drexler points out, ‘It’s impossible to compete with a big company that doesn’t want to make money.”
    4. You have to show shareholders tangible results for your vision.
  3. Global Reach: 
    1. Ability to go Global
    2. To be a truly large, meaningful company, you need a product that leaps geographic boundaries and appeals to people on a global scale.
    3. Again, it doesn’t require world domination, but rather proof that your product or service is so “digital-ish” that the normal rules of cultural friction do not apply.
  4. Likability:
    1. The world of commerce is regulated. Government, independent watchdog groups, and the media play a large role in a company’s growth.
    2. If you are perceived as a good actor, a good citizen, caring about the country, its citizens, your workers, the people in your supply chain that get you the product, you have created a barrier against bad publicity.
    3. In the words of Silicon Valley marketer Tom Hayes, who did just that for Applied Materials, “When the news is negative, you want to be perceived as a good company to which a bad thing has happened.”
    4. Image matters, a lot. Perception is a company’s reality. That makes the importance of being likeable, even cute, the fourth factor in the T Algorithm.
  5. Vertical Integration:
    1. Ability to control the consumer experience, at purchase, through vertical integration.
    2. All of the Four(Amazon, Facebook, Apple and Google) control their distribution. If they don’t produce the product, they source it, they merchandise it, they retail it, and they support it.
    3. The ROI of investing in the pre-purchase process (advertising) has declined. That’s why successful brands are forward integrating—owning their own stores or shopper marketing.
    4. Prof Galloway believes P&G will begin acquiring grocery retail, as they must develop a distribution that’s growing, and not depend on Amazon, who is their frenemy minus the friend part.
    5. Ex: Apple : Remember where you used to go get your Apple computer fixed fifteen years ago? There was a guy who looked like he’d never kissed a girl but was a pro at fantasy adventure games. He stood at a counter in front of piles of gutted computer parts, next to stacks of Macworld magazine.  Apple sensed the shift and put people in blue shirts, titled them “genius,” and set them in places that brought Apple products to life— spaces whose materials reinforced how special and elegant Apple products are. Apple stores today are intentionally beautiful; they remind you that Apple, and those who purchase its products, “get it.”
  6. Artificial Intelligence:
    1. Company’s access to, and facility with, data.
    2. A trillion-dollar company must have technology that can learn from human input and register data algorithmically—Himalayas of data that can be fed into algorithms to improve the offering. The technology then uses mathematical optimization that, in a millisecond, not only calibrates the product to customers’ personal, immediate needs but improves the product incrementally every time a user is on the platform for other concurrent and future customers.
    3. Best example of use of AI is Netflix autoplay for the next episode of a series, which has now been copied by other platforms.
  7. Accelerant:
    1. company’s ability to attract top talent. 
    2. This requires being perceived by likely job candidates as a career accelerant.
  8. Geography:
    1. Geography matters.
    2. Near best universities or the ecosystem.

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