The Unfair Advantage
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The Unfair Advantage:
How You Already Have What It Takes to Succeed
Ash Ali
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Success in the startup world is not simply awarded to the hardest workers. It is awarded to those who develop and use their Unfair Advantages.
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By ‘unfair advantage’ we do not mean an unethical or illegal advantage (although we’re sure there are many of those). An unfair advantage is a competitive upper hand, and your set of unfair advantages is unique to you. It’s more than just a unique selling point, it’s a fundamental leg-up over the competition, and sometimes it’s not one that is ‘earned’ or worked for.
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By knowing, developing and leveraging your unfair advantages, you will work on the right idea, partner with the right co-founders and develop a strong foundation.
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Voca
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founders
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‘It’s not about working harder. It’s about working the system.’
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However, it’s simply too reductive to think that, if you don’t win, it’s because you’re being outworked. This oversimplification of hard work = success is not only misleading, it can be downright confusing when you don’t know what to work hard on. Remember what Evan Spiegel said: ‘It’s not about working harder. It’s about working the system.’ Working hard without working smart is useless. For example, you can work incredibly hard designing and building a product, but if it’s a product that nobody wants, then tough luck, you’ll get nowhere, despite your long hours and blood, sweat and tears.
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We were both brought up in stable, loving families in a wealthy developed country with excellent education systems, a free national health service and some safety nets to take risks, as we weren’t exactly going to end up starving on the streets or anything.
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Her own turbulent childhood enabled her to convert that first-hand experience into heartfelt compassion and powerful emotional intelligence. This is an example of an important concept that’s at the heart of this book: every disadvantage can have a corresponding advantage, and vice versa. Your circumstances and unfair advantages, whether apparently positive or negative, can be double-edged swords.
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Tiger appeared on television putting golf balls and being hailed as a prodigy, and at age three, he shot a score of 48 for nine holes, a respectable score for many adults. Sure enough, his natural talents and his father’s nurturing of that talent led to a phenomenal career.
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And hard work also plays a very important role, because it’s true that hard work beats talent when talent doesn’t work hard. But combine the two and that’s when you get rocket fuel.
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We can go even deeper and ask: Why did Warren work so hard? The answer is he did so because he had a natural affinity for investing. In other words, he loved it.
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Part of being ‘wired’ for something, or having a talent for something, can be thought of to include the inclination to take part in it, and to practise it and become obsessed with it. They absolutely loved it, they were drawn to it and so they did it.
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Warren Buffett says: ‘I got to do what I love. It doesn’t get any luckier than that … I tap dance to work every morning and every day is exciting.’
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‘Many people in the world hate their job’, the report says. In the UK, only a measly 17 per cent of people love their jobs.
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The key, as we’ll discuss later in the book, is to experiment and focus on what will add value to others. That way, you can find something valuable to do (i.e. something you will be paid for, whether through entrepreneurship or through employment) and find fulfilment in that.
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Likewise, if you are unaware of the effect of effort and hard work, and the power that you yourself have to improve your life, then you can become bitter and inflicted with a disempowering victim mindset where, instead of looking at what you have in your favour, you focus on what you don’t.
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actions to take next. We want to teach you how to work smart. We want you to work, from now on, from a position of strength, and from a foundation of your unfair advantages, in your startup, or even in your career.
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you can massively increase your chances of success by finding and leveraging your unfair advantages.
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stack the deck in your favour to succeed.
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Life isn’t fair. But if you use the unfairness of life as an excuse to have a victim mindset, to stop yourself from striving to achieve your goals, to make your dreams a reality, then you’re only shooting yourself in the foot.
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Your unfair advantages might be where you were born, who you know and what money you have. Equally, your unfair advantages can be your personal interests, your skills, talent or expertise, your lived experience that gives you a unique insight into a problem, or your ability to access a key audience or build your company in a particularly advantageous place.
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Your Unfair Advantages can’t easily be copied or bought. Your set of Unfair Advantages is unique to you.
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Investors and venture capitalists (VCs) expect you to be able to articulate what they call ‘your personal edge’, or your unfair advantage.
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Competitive advantages are to businesses what Unfair Advantages are to individuals and early-stage startups. Now the company has its own brand power, its own institutional advantages of scale, cash flow, a database of customers, suppliers and partners.
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To paraphrase Archimedes’ famous saying: With a place to stand, and a lever long enough, I can move the world. In other words, by using leverage, you can multiply your impact exponentially to achieve your objective.
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Working smart, however, is directing and multiplying that effort and those long hours in the right way to make your business succeed. We all have the same 24 hours in a day. What matters is knowing how to spend that time. Knowing and using your unfair advantages gives powerful leverage.
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unfair advantages lead to success when leveraged,
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He explains how those born in the earlier months of the year tend to do better because they are older and more developed, so tend to be bigger and stronger than those born in the later months of the year.
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A film that’s a box-office success will attract more movie-goers. A book that’s a bestseller will attract more readers. A YouTube video with lots of views will get more views. In this context, the more unfair advantages you have, the more you are likely to accrue. The key is to start identifying and developing your own unfair advantages as soon as possible, no matter your age.
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You have to learn, pivot and see what gets traction. Traction is growth, and fast growth is the name of the game.
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The Start-Up of You. He
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He points out that all companies should first begin by considering why they exist, and then allowing that purpose to flow through everything they do to their customers.
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It is very important to have a sense of ‘why’ as an entrepreneur or founder. At the core of your actions (whether you are aware of it or not) is a deeper belief and sense of purpose guiding the choices you make. Your ‘why’ can change over time based on the experiences you have, but as human beings, when it comes down to it, we’re usually driven by just a few core motivations. As you embark on your startup journey, or any project that you undertake, ask yourself why you’re doing what you’re doing, and why you have set yourself such a goal.
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Due to the arbitrary and unequal distribution of unfair advantages, your ‘why’ is particularly important in terms of how you define success for yourself. Ideally, your ‘why’ must come from you alone, because if it is driven by other people’s expectations, or a need for approval from others, suffering will be the outcome even if you succeed. Asking yourself that question will help you determine your real motivations for striving to achieve what you want to achieve.
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Why? Ik wil dat er minder eenzaamheid is. HWZ laat jenvrienden sluiten met jezelf.
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Ash, on the other hand, scores so highly on openness that he finds it challenging to say ‘no’ to new opportunities and the new ideas that he constantly has. Limiting the number of projects he works on, and therefore having more focus, has helped him to become a more productive and impactful entrepreneur.
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The growth mindset is perfectly encapsulated in one word: ‘yet’. ‘I can’t write code … yet.’ ‘I can’t write a business plan … yet.’ ‘I can’t find a co-founder … yet.’ This three-letter word opens up a whole realm of possibilities.
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If you only think ‘The sky is the limit!’, then your head will be full of crazy daydreams, but when you look around at your life and see the huge disparity between your dreams and your current situation, you may experience guilt, disappointment and distress. You’ll blame yourself, or you might become bitter and blame everybody else.
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A reality-growth mindset is the ability to accept the hard limits of the way things are (like the physical laws of the universe) and also to believe that anything is possible (the metaphysical way of looking at the universe). It acknowledges that there are limitations, but that those limitations are more malleable than some people may think.
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Self-belief, says ‘I am going to succeed in my own way, and even if my goal feels like a stretch, I can step up to the challenge, and probably have a lot more impact than I can even imagine.’
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It would be impossible for you to create Google in the same way today. Even if you did want to build a competing search engine, you would need some kind of unique insight or technological unfair advantage. This is a truth. It doesn’t mean success is out of reach for you. It means you will have to take a different path and leverage your own unique set of unfair advantages.
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People will follow a leader with vision, even if that vision turns out, in the end, to be a poor one. The person with vision serves as a prophet, voicing the unknown and bringing it into reality. If you are not able to imagine the future with your organisation, there is really little reason to continue moving forward. One setback, and you’re done.
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Money is not the only type of capital we have, though. Sociologist Pierre Bourdieu said we all have three forms of capital: economic capital (money), social capital (our network of friends and allies) and cultural capital, which is essentially everything else that can get you respect or prestige (for example, knowledge, qualifications, titles, occupation, how you talk, your accent, how you dress, your body language, your tastes and hobbies, etc.).
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Finally, as we’ll discuss in Chapter 17 (Fundraising), the first people to invest in a startup after the founders themselves are the three Fs: Family, Friends and Fools. Of course, ‘fools’ is tongue-in-cheek and reflects the high risk of investing in a startup, and hopefully they wouldn’t be foolish to invest in yours. However, your ability to raise funding through knowing rich people and being able to convince them to fund you can also be thought of as a Money advantage. For example, if your friends and family are wealthy, they can afford to take a punt and invest in your startup.
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A good general rule of thumb is that you need at least 6 to 18 months of runway time if you’re going to quit a full-time job and focus on a startup.
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The main thing to consider if you don’t have the unfair advantage of Money is to build a business that doesn’t have a high startup cost, and doesn’t need to burn much money before it becomes profitable. In other words, get paying customers fast. Let that be your first priority.
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‘growth scrapping’
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The key is to spend more time on the problem than on your solution to that problem.
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What we look for in ideas is not the type of idea but the level of insight you have about it. It’s a common mistake to say the distinctive thing about your solution will be that it’s well-designed and easy to use. That is not an insight. You’re just claiming you’re going to execute well. Whoever wrote the current software was presumably also trying to. So you have to be more specific. Exactly what are you going to do that will make your software easier to use? And will that be enough?
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The main way for you to get insight is by talking to potential customers. It’s that simple.
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Higher status commands attention. Higher status makes you an influencer. A high number of social media followers can be a cause and also an effect of high status. However, you can also have high status without any social media followers, simply by being in a culturally prestigious occupation, or working for a high-status brand.
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Because, remember, status is your perceived ability to add value. Value can be in the form of wisdom, entertainment, spreading good emotions, solving problems for people, achieving something difficult, being cool, trendy, aspirational, attractive or interesting. That’s why it’s more complicated and expansive than just whether you’re ‘upper class’, ‘white’ or ‘male’–we all have a certain status in different situations.
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Status can be in the form of titles, ranks or qualifications, like Sir Richard Branson or Lord Alan Sugar. It can be in the form of prestigious universities or companies. It could be about gender, class, height, race, colour, perceptions of beauty, displays of wealth, language fluency, having the right accent, wearing the right watch, driving the right car, being famous, having friends in high places, or even just signalling that you’re ‘cool’ or are part of the right subculture.
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Economic capital is covered in Chapter 7 (Money) and is simply the concrete and tangible form of wealth in the sense of money, assets and property. Cultural capital is linked to your social class (or even your subculture), which is reflected in your accent, credentials, set of tastes, hobbies and pastimes, manner of speech, manner of dress, posture, possessions, etc.
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Social capital, the third form of status, is your network, your relationships, your connections. We include this in Status because who you know is part of your status (which is why people often like to name-drop a high-status person in conversation–a celebrity, for example–to increase their own status by association). Your network is the people you’re connected with in some way and who therefore could open doors for you to opportunities, give you valuable insights and information, and act as allies and potential collaborators. The way to increase your connections ‒ your network ‒ is through adding value, finding commonalities and being social. Your network is who would return your call, reply to your email or take a coffee meeting with you.
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Sara Blakely says her father used to ask them at dinnertime every day what they had failed at that day. And he wasn’t happy until they had something to tell him every day. This taught them not to fear failure, which Sara attributes to helping her succeed.
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deals weren’t getting much traction. The brands would drag their feet, and just generally didn’t show much enthusiasm in partnering up with this ‘online food ordering’ startup. After that first TV ad, an expensive prime-time slot during The X Factor, it was a different story. Suddenly everyone started returning Ash’s calls. Suddenly they all wanted to partner up. Which just shows that status also works for a brand, and a big TV ad campaign gave Just Eat status and broadcast the fact that they weren’t just a scrappy startup any more.
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A large and powerful network can give you mentors, investors, peers and customers. We can’t emphasise enough how powerful a strong network is.
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Inner Status
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Ik denk dat dit bij mij heel hoog is/zit
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Your Inner Status is an extremely powerful way to increase your Outer Status. It is your self-esteem. Your confidence. Self-esteem is just a fancy way of saying ‘liking yourself’. And whether or not you’re confident or have high self-esteem always shines through to other people. They pick up on it, consciously and unconsciously, through your body language, voice tonality and other subtle clues in your behaviour. That’s how inner status increases your outer status.
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Get clear on your goals and values. What do you want for your lifestyle? What do you want for your legacy? What moral code are you willing to stick to?
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however, know that you need a balance of self-belief and realism. You need to know the limits of possibility for yourself in the short term. We overestimate what we can achieve in a month, and dramatically underestimate what we can achieve in a decade. Be sure to love yourself for where you’re at in life at this moment.
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If you pin your self-love and happiness to something external, you’ll either keep moving the finish line and never be happy, or you’ll experience the most profound anticlimax in your life and get depressed when you realise that achieving your external goal does not fill the inner void. Love yourself and accept yourself, wherever you’re at as a starting point, then self-improve from there.
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Psychology tells us that, for most people, the away-from-pain motivation (the stick) is actually the more powerful motivator.
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Beware of confusing society’s symbols of success (fast cars, private jets, designer clothes, fancy restaurants, exotic holidays) and actual success (happiness, fulfilment, self-actualisation, growth, learning, adding value to others, having positive impact, having the freedom to spend quality time with the people you love).
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So, in order to increase your chances of success, in your founding team you need somebody who has the technical Education and Expertise, and somebody who has the Intelligence and Insight to find a gap in the market (in other words, an unfulfilled need) and to be able to commercialise and carry out the marketing and sales required to get some traction.
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But, to even be in with a chance, you really have to be able to get to that stage, through bootstrapping yourself (having Money), through building your Status and credibility (through Expertise) and building your connections (your Status). You’re also likely to need to move to a tech startup hub (Location) and, most importantly of all, you need to reach the stage of having some traction ‒ which comes from creating a product that people actually want.
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And credibility comes from having an Insight into a problem, and having some Expertise on how to solve that problem.
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‘The pioneers take the arrows, the settlers take the land.’
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Great ideas come when you put a twist on existing things, consider a problem from another point of view, or take a solution from one industry and apply it to another, or from one geographic region to another.
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Again, what you have to ask yourself is: What is the problem I am going to solve?
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Product–market fit is a famous concept in startups. Having product–market fit means that your product satisfies a strong market demand–i.e. there are enough people out there who strongly want what you have to offer.
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In a startup founding team, what you need is a creator, a communicator and (often) a technician.
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The creator is the visionary who wants to see their product being loved and used by users and customers, and who is focused on ‘making a ding in the universe’, as Steve Jobs called it. The communicator is the commercial co-founder who can sell and market, communicate with customers and prospective customers, and feed this back to the team. The communicator is also the one who ‘sells’ the investment opportunity to investors, and is therefore the chief fundraiser. And finally the technician is the one who builds the technical side and makes sure it works, whether that be software, an app, a website, a life-saving drug or the formulation for a lipstick or foundation. So it could be an engineer, a chemist, a biologist, or a technician of any kind.
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As mentioned, that’s where the MILES Framework can come in handy: to allow you to figure out how you’ll get the Money, the Insights, the Expertise and the Status to help you build your startup.
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There are two ingredients needed to develop your network: 1. An authentic desire to add value to people you meet 2. Increasing your Status so that people perceive more value from you
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That’s the thing about social interactions ‒ spreading positive emotions, even if it’s simply a warm smile, costs you nothing, and pays you dividends.
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The strength of your network increases the more you add value to it. You can add more value to your network by proactively reaching out to people periodically, and not just when you want something from them.
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You can literally set up a daily habit of reaching out to one relevant person from your network simply to add value, even if in a small way, such as by asking how they are, or forwarding them an article, or commenting on a status they’ve put on a social media network.
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I get a lot of messages and emails from people asking if they can buy me lunch or a coffee to pick my brain, and Ash gets even more. We couldn’t have that many lunches or coffees even if we wanted to.
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The successful people are those who seek to add value.
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You have to build something that’s crappy, but that works. Crappy? Yes. In most industries, especially the ones where you’re specifically solving a strong problem, it doesn’t matter if the product doesn’t look good (unless looking good is the need it is meeting). It doesn’t matter if it sometimes crashes and restarts itself as an app. It doesn’t matter if it has typos and mistakes. What matters is whether it solves the problem or not.
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Ash is known as a ‘growth hacker’. It means that he is great at making a startup grow fast. Startup founders often ask him: How do I do growth hacking? Ash’s answer? Before growth hacking, you’ve got to do growth scrapping. What does this mean? It means that, before you think about doing big scalable marketing campaigns using Google and Facebook ads, you need to creatively find each of your early customers/users manually. In this early stage, before you’ve reached the stage of product–market fit (which is when word of mouth helps you grow virally), you need to really ‘hustle’. You need to manually, one by one, get your first set of customers or clients. Preferably you do this face to face, or at least directly through personalised messages and outreach using social media and email. And make sure you don’t spam them! Hustle in a clever way by doing your homework on each person. Realise that you’re going to get a lot of rejections and that you’ll need to develop a thick skin. This is called marketing, sales and business development. Mindset is critical at this stage. Being resilient. Having the vision to motivate yourself. Having the determination, perseverance and grit to just get on with it and unearth an unmet need.
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For example, rather than trying to spam out an email to hundreds of people, do it manually one by one, crafting and personalising each email to match each person. Meet people face to face. Call people on the phone. Go out of your way to get sales and keep customers happy, rather than worrying that you won’t be able to scale this later.
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Another way you can apply this edict of ‘do things that don’t scale’ is to give amazing customer service to your early users/customers. Don’t worry too much that as you grow, you won’t be able to keep up this level of customer service, because hopefully by then your product will have improved to the point that fewer people will need that service.
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You growth scrap to build some traction, to build some momentum and forward progress in your startup.
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How do you do that? You make sure that you measure your growth and focus on it every day. You concentrate on sales, and product development based on customer feedback, to make your customers love your product even more.
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Wikipedia describes growth hacking as ‘a process of rapid experimentation and testing across marketing channels and product development to identify the most effective, efficient ways to grow a startup rapidly’.
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Which basically means you find one or two great marketing acquisition channels and double down on them, then continue to develop good organic growth features in your product or service, e.g. a refer-a-friend scheme. At the heart of growth hacking is creativity.
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Growth hacking is the intersection between creativity, marketing and tech. It requires a ‘test, fail, repeat, test, fail repeat, scale’ mindset.
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And remember that what worked in the past will often not make you a success today. That’s why the mindset is more important than the tactics and why being a growth hacker means unlearning and relearning all the time. The true growth hacker has a growth mindset. They are not attached to any particular marketing or distribution channel. They are not in love with what worked in the past. They are looking at the world as it is, assessing options, testing often, and then making a move on what works best. Ultimately the most important thing is to get the fundamentals right, which means having an excellent product or service that makes customers happy. Once you have that, you have product–market fit. Only then should you think about growth hacking to scale your growth and inject more fuel (usually money) onto the fire.
