We Study Billionaires - The Investor’s Podcast Network

TIP600: Business Durability and Strategy Masterclass with Hamilton Helmer

Jan 14, 2024

Hamilton Helmer, an expert in strategy and investing, discusses the power of being an educator and shares his 7 powers. Topics include: differentiating power and operational excellence, observing brand power, switching costs, the distinction between power and strategy, cornered resources, and changes in capital availability for private businesses.

44:40

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Hamilton Helmer

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Quick takeaways

Operational excellence and market size are important, but creating and controlling power is crucial for long-term success in business.

Identifying barriers that competitors find difficult to mimic is essential in maintaining a sustainable advantage.

Deep dives

The Power of Being an Educator in Strategy and Investing

Hamilton Helmer discusses how being an educator at Stanford University's Economics Department helped him improve his abilities in strategy and investing. Teaching forced him to understand the subject deeply and explain it to his students. This interaction with bright and engaged students stimulated his thinking and contributed to his expertise in the field. Being both a professor and an investor, Helmer's experience in strategy consulting and working with operating companies provided valuable insights into the formulation of his seven powers and their application in his investment strategy.

Benefits are common, barriers are not

01:35

Corner Resources and the Importance of Inimitable Intellectual Property

02:43

Success and Failure in Overcoming Counter Positioning

01:14

Operational Excellence and Strong Leadership in Building a Successful Business

02:07

Introduction

4min

The Importance of Investing and Competitive Arbitrage

8min

Operational Excellence and Strong Leadership: Lessons from Netflix

5min

The Importance of Demand and Feedback Mechanism

10min

Switching Costs, Branding, and Corner Resources

10min

Valuable Resources, Patents, and Intellectual Property

8min

Availability of Risk Capital and Promoting a Book and Fund

2min

On today’s episode, Kyle talks to Hamilton Helmer about the power of being an educator and how it’s helped him improve at strategy and investing, the differences between power and operational excellence, how he formulated his 7 powers, a deep dive into all 7 powers, updated case studies of some of the powers, why barriers are so important when benefits are much easier to find.

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro

01:41 - How Hamilton uses his knowledge of strategic consulting to invest in companies with durable competitive advantages.

01:52 - How Joseph Schumpeter has helped shape Hamilton’s strategy on entrepreneurship.

14:00 - Traits of earlier stage businesses with potential for power.

20:25 - How to observe the power of a brand to ensure its advantage isn’t being eaten away.

24:02 - How businesses with switching costs power can keep customers happy while increasing prices.

24:12 - Hamilton’s personal story of the power of Apple’s brand and switching costs.

29:12 - The distinction between power and strategy.

30:46 - The power of cornered resources.

32:50 - Why algorithms are not a cornered resource.

38:01 - Changes in capital availability for private businesses.

And so much more!

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
Check out Hamilton’s book, 7 Powers: The Foundations of Business Strategy.
Learn more about Strategy Capital.
Learn more about the Berkshire Summit by clicking here or emailing Clay at clay@theinvestorspodcast.com.
Follow Kyle on Twitter and LinkedIn.
Check out the books mentioned in the podcast here.

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