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Grant's Newsletter (Enron, PMF, Kickoff)

Happy Friday!
Here are three things I’ve been thinking about this week:

1. Enron
As a CPA, I’ve always been fascinated by the Enron disaster, so I had to pick it up.
In school, I’d always learned that the scandal was bad, but this book really got into the details.
Here are some business lessons from what Enron did wrong (outside of the clear fraudulent behavior):
#1 Frugality
Enron’s expenses were out of hand - they had private jets, huge bonuses, and expensive consultants.
Compare this to Amazon (which was rising during Enron’s fall). Amazon has a famous culture of frugality - they didn’t let their executives fly business class for years.
Frugality is key to business building.
#2 Focus
Enron thought that its initial success meant that it could dominate any business.
While it’s ok to cautiously experiment in new businesses once you have a solid footing, Enron was spending billions on uncertain business lines (i.e. trading broadband).
Focus on your core business.
#3 Conservatism
I’m as optimistic about the future of technology as any.
But, that doesn’t mean everything with your business will pan out exactly how you expect.
Enron would plan the future as if nothing would ever go wrong.
In summary, don’t be Enron.
2. Product-Market Fit
The Acquired Podcast is one of my favorite business podcasts.
The hosts go into excruciating detail to tell the stories of companies like Shopify, TikTok, and Standard Oil.
In the episodes, they talk about Hamilton Helmer’s strategic framework called 7 Powers to assess the capability of these great companies.
Helmer writes that there are 7 Powers that give a business a competitive advantage:
  • scale economics
  • network economics
  • counter-positioning
  • switching costs
  • branding
  • cornered resource
  • process power
While the 7 Powers are useful, they aren’t important until the company has found Product-Market Fit (i.e. will people actually buy what you’re selling).
Without Product-Market Fit, assessing your Power doesn’t really matter.
One takeaway from 7 Powers and interviews by @AcquiredFM with Hamilton Helmer:

If you haven't reached PMF, don't worry about scale, branding, switching costs, etc.

PMF is a different problem than power
Acquired Podcast
@grant_nissly 💯

Two completely different unique inventions.

And power is not worth discovering without PMF first!

(Though it could be worth contemplating it to quickly enact a strategy once PMF is found).
3. GFW Cohort Launch
We had our live kickoff meeting this Wednesday for the Great Founders Write Cohort.
It was a blast, and I can already tell that this cohort is going to be a ton of fun.
Ben Putano 📚
The first #GreatFoundersWrite cohort meeting is in the books!

This group is incredible.

19 founders, 5 countries, 1 goal: To build our businesses through the power of writing.
Thank you for reading!
Have a great weekend and talk to you next week.
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3 things I've been thinking about this week. Published every Friday. Mostly covering education, business, tech, and updates on what I'm working on.

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